Abstract

http://ssrn.com/abstract=1662594
 
 

References (31)



 
 

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The Impact of Risk and Monitoring on CEO Compensation


Ana M. Albuquerque


Boston University - School of Management

George Papadakis


Boston University

Peter D. Wysocki


University of Miami - School of Business Administration

August 20, 2010

AAA 2011 Management Accounting Section (MAS) Meeting Paper

Abstract:     
This paper uses a novel empirical setting to explore the association between a firm’s operational risk, managerial monitoring costs, and how managers are compensated. We investigate a sample of supplier firms that rely on a few large customers for the bulk of their revenues. We predict that supplier firms with higher customer concentration face both higher exogenous idiosyncratic risk and lower monitoring costs and, as a result, will rely less on equity-based managerial incentive compensation contracts. Our empirical results support this prediction.

Number of Pages in PDF File: 49

Keywords: CEO, Compensation, Customers, Incentives, Monitoring, Risk, Suppliers

JEL Classification: G30, D81, M40

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Date posted: August 22, 2010  

Suggested Citation

Albuquerque, Ana M. and Papadakis, George and Wysocki, Peter D., The Impact of Risk and Monitoring on CEO Compensation (August 20, 2010). AAA 2011 Management Accounting Section (MAS) Meeting Paper. Available at SSRN: http://ssrn.com/abstract=1662594 or http://dx.doi.org/10.2139/ssrn.1662594

Contact Information

Ana M. Albuquerque (Contact Author)
Boston University - School of Management ( email )
595 Commonwealth Avenue
Boston, MA 02215
United States
617-358-4185 (Phone)
617-353-6667 (Fax)
George Papadakis
Boston University ( email )
595 Commonwealth Avenue
Boston, MA 02215
United States
Peter D. Wysocki
University of Miami - School of Business Administration ( email )
Department of Accounting - K/E 308
5250 University Drive
Coral Gables, FL 33146-6531
United States
305-284-8618 (Phone)
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