Understanding high-powered incentives in organizations
Name
1051222866-MIT.pdf
Description
Full printable version
Size
13.62 MB
Format
Adobe PDF
Checksum (MD5)
9e3dc106c740b2a58f96081c9989fe25
Author(s)
Zheng, Shuo, S.M. Sloan School of management
Advisor(s)
Egor Matveyev.
Date Issued
2018
Publisher
Massachusetts Institute of Technology
Abstract
I study how the compensation structure of top managers from US public companies changes in recent years and the effect of these incentives on firm performance. I first explore the trend of executive compensation structure and performance metrics used in executive compensation over the years. I also examine systematic differences across industries and different firm sizes. Then I analyze the relationship between compensation structure and firm performance. My results suggest that a higher level of incentive-based compensation correlates with higher growth in total shareholder return; particularly for small firms, a higher level of incentive-based compensation correlates with significantly higher total asset growth, sales growth and employment growth as well. To explore whether the level of incentive-based compensation has influence on firm performance, I use propensity score matching to reduce selection bias. My results suggest that the level of incentive-based compensation has no significant influence on firm performance.
Description
Thesis: S.M. in Management Studies, Massachusetts Institute of Technology, Sloan School of Management, 2018.
Cataloged from PDF version of thesis.
Includes bibliographical references (page 33).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
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