Pay-Performance Sensitivity: An Analysis of Japanese Compensation
Posted: 22 Aug 1998
Date Written: No Date
The pay-performance sensitivity of Japanese CEO compensation is systematically associated with both firm characteristicsand individual attributes as invoked from agency theory and human capital theory. The results support the hypothesis that continuous monitoring by the main bank and other member firms of the same business group contributes to aligning the interests of Japanese CEOs with those of outside shareholders through an enhanced sensitivity of CEO compensation to firm performance. Additionally, firm size, and the CEO's age and tenure as CEO influence pay- performance sensitivity in Japanese firms.
JEL Classification: J33
Suggested Citation: Suggested Citation