An Empirical Investigation of the Role of Subjective Performance Assessments Versus Objective Performance Indicators as Determinants of CEO Compensation

Fanny Caranikas-Walker; Luis R. Gómez‐Mejía; Robert L. Cardy; Arden Grabke Rundell

doi:10.2753/jmr1536-5433060101

Enriched recordOpen access

An Empirical Investigation of the Role of Subjective Performance Assessments Versus Objective Performance Indicators as Determinants of CEO Compensation

Fanny Caranikas-Walker, Luis R. Gómez‐Mejía, Robert L. Cardy, Arden Grabke Rundell

Management Research: Journal of the Iberoamerican Academy of Management2008doi:10.2753/jmr1536-5433060101

Citation graph

Abstract

The empirical support for agency theory explanations for the great variance in CEO pay has been equivocal. Drawing from the performance appraisal literature, we hypothesize that boards of directors incorporate human judgment into the evaluation and reward of CEO performance in order to balance managerial risk with agency costs. We test Baysinger and Hoskisson’s (1990) proposition that insider‐dominated corporate boards rely on subjective performance evaluation to reward the CEO, and we argue that R&D intensity influences this relationship. Using a sample of Fortune firms, findings support our contention that human judgment is important in evaluating and rewarding CEO performance.

Authors

Fanny Caranikas-Walker#1 Luis R. Gómez‐Mejía#3 Robert L. Cardy#4 Arden Grabke Rundell#5

Institutions

Arizona State University The University of Texas at San Antonio University of Minnesota, Duluth

Provenance

crossref

Referenced works

View all references →

No local reference links have been materialized yet.

Cited by

View all cited-by records →

No local citing links have been materialized yet.

External reference records

10.1111/j.1468-232x.1981.tb00180.x

10.1111/j.1468-232x.1981.tb00180.x · 1981

10.1037/10520-147

10.1177/105960118200700410

10.2307/2393255

10.1002/smj.4250080207

10.2307/257098

10.5465/amr.1990.4308231

10.5465/amr.1990.4308231 · 1990

10.2307/2393238

Unresolved referenced work

Kept as external metadata until matched

10.7208/chicago/9780226041223.001.0001

10.1017/cbo9780511817410.006

10.1177/001872679705000704

An Empirical Investigation of the Role of Subjective Performance Assessments Versus Objective Performance Indicators as Determinants of CEO Compensation

Referenced works

Cited by

External reference records

Additional external references