Commentary: Performance Evaluation and Compensation Research: An Agency Perspective

Abstract:     
How managers and executives are evaluated and rewarded has become an increasingly contentious issue in recent years. The benefits and pitfalls of firms? compensation practices are routinely featured in the business press and have attracted considerable attention from governments, unions, as well as the investment community. In some cases, this increased attention can be attributed to the apparent excessive levels of remuneration paid to U.S. executives. More generally, it reflects a heightened awareness that performance evaluation and reward systems are critical because they affect employees? incentives to increase shareholder value.

JEL Classification: M41, J33

Accepted Paper Series