Executive Equity Compensation and Incentives: A Survey

24 Pages Posted: 6 Sep 2005  

John E. Core

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Wayne R. Guay

University of Pennsylvania - Accounting Department

David F. Larcker

Stanford University - Graduate School of Business

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Abstract

Stock and option compensation and the level of managerial equity incentives are aspects of corporate governance that are especially controversial to shareholders, institutional activists, and governmental regulators. Similar to much of the corporate finance and corporate governance literature, research on stock-based compensation and incentives has generated not only useful insights, but also has produced many contradictory findings. Not surprisingly, many fundamental questions remain unanswered. In this article, the authors synthesize the broad literature on equity-based compensation and executive incentives, and highlight topics that seem especially appropriate for future research.

Keywords: Executive compensation, stock options, equity incentives, corporate governance

JEL Classification: G32, G34, J33, M41

Suggested Citation

Core, John E. and Guay, Wayne R. and Larcker, David F., Executive Equity Compensation and Incentives: A Survey. Economic Policy Review, Vol. 9, No. 1, April 2003. Available at SSRN: https://ssrn.com/abstract=794806

John E. Core (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

77 Massachusetts Ave.
E62-416
Cambridge, MA 02138
United States

Wayne R. Guay

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
1329 Steinberg-Dietrich Hall
Philadelphia, PA 19104-6365
United States
215-898-7775 (Phone)
215-573-2054 (Fax)

David F. Larcker

Stanford University - Graduate School of Business ( email )

Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

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