Stock-Based Pay in New Economy Firms

Posted: 5 Feb 2003

See all articles by Kevin J. Murphy

Kevin J. Murphy

University of Southern California - Marshall School of Business; USC Gould School of Law

Abstract

Ittner, Lambert, and Larcker (J. Accounting Economics (2003)) present compelling evidence that new economy firms rely more on stock-based compensation than do old economy firms, based on 1998 and 1999 data from a proprietary sample of companies. I complement the ILL results by analyzing data over a longer time period (1992-2001) and, more importantly, document the effect of the 2000 market crash on stock-based pay in new economy firms. Finally, I offer evidence supporting the conjecture that differences in pay practices between new and old economy firms reflect accounting considerations, perceived costs, and competitive inertia.

Keywords: executive compensation, stock options, new economy

JEL Classification: J33, J44

Suggested Citation

Murphy, Kevin J., Stock-Based Pay in New Economy Firms. Journal of Accounting & Economics, Vol. 34, Nos. 1-3, pp. 129-147, January 2003. Available at SSRN: https://ssrn.com/abstract=377522

Kevin J. Murphy (Contact Author)

University of Southern California - Marshall School of Business ( email )

BRI 308, MC 0804
Los Angeles, CA 90089-0804
United States
213-740-6553 (Phone)
213-740-6650 (Fax)

USC Gould School of Law

699 Exposition Boulevard
Los Angeles, CA 90089
United States

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