Asymmetric benchmarking in compensation: Executives are rewarded for good luck but not penalized for bad
By G. Garvey, Todd Milbourn. 2006
468 citations recorded by the source corpus.
Subfields: Accounting, Finance
View Paper: https://www.semanticscholar.org/paper/d98fb1d3d41142579b2c4a16ecb7b196354e628a
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Accounting
- Fenghua Song
- Jarrad Harford
- Radhakrishnan Gopalan
- Tao Chen
- Chen Lin
- B. Gerhart
- Yaniv Grinstein
- Martijn Cremers
In Finance
- Radhakrishnan Gopalan
- Fenghua Song
- Chen Lin
- Jarrad Harford
- Yaniv Grinstein
- Martijn Cremers
- Tao Chen
- Omesh Kini
Citations in the corpus
- 6 Pay and Performance: Individuals, Groups, and Executives (2009, background): “In addition, some evidence suggests that this relationship is asymmetric, such that executives benefit in up‐markets, but are not penalized as strongly during down‐markets (Garvey & Milbourn, 2006 ), providing further reason for concern with CEO pay.”
- Does the use of peer groups contribute to higher pay and less efficient compensation (2008, unknown): “In contrast, boards at firms with CEOs whose pay is already high relative to their 9 Our sample includes four additional years of data compared with Garvey and Milbourn (2006).”
- Do Analysts Matter for Governance? Evidence from Natural Experiments (2015, background): “Some recent papers such as Giroud and Mueller (2010) find that firms in noncompetitive industries benefit more from good governance than do firms in competitive industries.”
- Does the Market for CEO Talent Explain Controversial CEO Pay Practices (2014, methodology): “To separate the component of performance that is due to luck from the component that is due to skill, our two-stage regression closely follows Garvey and Milbourn (2006) and Bizjak, Lemmon, and Naveen (2008).”
- Strategic Flexibility and the Optimality of Pay for Sector Performance (2010, methodology): “To do this, we follow the approach used in Bertrand and Mullainathan (2001) and Garvey and Milbourn (2006) and break the test into two stages.”
- Executive Compensation: A Survey of Theory and Evidence (2017, unknown): “Their anti-takeover indexis positively correlated with more asymmetric performance benchmarking (Garvey and Milbourn, 2006), higher levels of CEO pay and lower wealth-performance sensitivities (Fahlenbrach, 2009), and more rigging of incentive contracts towards favorable performance metrics (Morse”
- Asymmetric sensitivity of CEO cash compensation to stock returns (2006, background): “17 Interestingly, Garvey and Milbourn (2004) also report that cash compensation is more sensitive to firmspecific bad news (their Table 5 results on ‘bonus’), though they offer no explanation for this finding.”
- Tournament Incentives, Firm Risk, and Corporate Policies (2012, background): “4 Finally, there is convexity in part of the typical annual bonus plan (e.g., Healy, 1985; Gaver, Gaver, and Austin, 1995; and Murphy, 1999).”
- Are Incentive Contracts Rigged by Powerful CEOs (2011, unknown): “Our empirical tests use industry adjusted performance measures to ensure that the effects we document are after controlling for the type of luck factors in Bertrand and Mullainathan (2001) and Garvey and Milbourn (2006).”
- The Incentives of Compensation Consultants and CEO Pay (2010, background): “One way in which firms can reduce the link between the CEO’s performance and compensation is to place less weight on firm-specific performance (ADJ_ROA) that captures CEO effort and skill (Garvey and Milbourn, 2006).”