Virtus InterPress

HOW TO CONTROL THE CONTROLLER – CEO COMPENSATION AND MOTIVATION

Udo C. Braendle, John E. Katsos

DOI: 10.22495/cocv11i1art2

Abstract

One of the main control mechanisms that shareholders have used to rein in rogue managers is compensation. Through a combination of intrinsic and extrinsic incentives, shareholders have tried to provide the right balance to motivate senior managers to perform at their best. Shareholders have often failed in achieving this balance through compensation. In this paper, we argue that this failure is not the result of compensation packages as such, but on the focus of compensation packages on extrinsic motivators such as pay-for-performance bonuses and stock options. Instead, the focus of compensation packages should be on cultivating intrinsic motivators such as firing and prestige.

Keywords: CEO, Compensation, Motivation, Corporate Governance, Agency Theory

How to cite this paper: Braendle, U. C., & Katsos, J. E. (2013). How to control the controller – CEO compensation and motivation. Corporate Ownership & Control, 11(1), 24-31. http://dx.doi.org/10.22495/cocv11i1art2

Download This Article
Corporate Governance Experts Global Repository
Merio Honor Честь
Ryoushin Conscience Совесть
Kouki Nobility Доброе имя