Authors: Dyballa, Katharina
Kraft, Kornelius
Title: Does codetermination affect the composition of variable versus fixed parts of executive compensation? - An empirical analysis for listed companies in Germany
Language (ISO): en
Abstract: Contrary to previous literature we hypothesize that interests of labor may well – like that of shareholders – aim at securing the long-run survival of the firm. Consequently, employee representatives on the supervisory board could well have an interest in increasing incentive-based compensation to avoid excessive risk taking and short-run orientated decisions. We compile unique panel data on executive compensation over the periods 2006 to 2011 for 405 listed companies and use a Hausman-Taylor approach to estimate the effect of codetermination on the compensation design. Finally, codetermination has a significantly positive effect on performance-based components of compensation, which supports our hypothesis.
Subject Headings: Executive Compensation
Corporate Governance
Principal-Agent Theory
Issue Date: 2015
Appears in Collections:Sonderforschungsbereich (SFB) 823

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