Efficient management remuneration plan design: a consideration of specific human capital investments
Article
Article Title | Efficient management remuneration plan design: a consideration of specific human capital investments |
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ERA Journal ID | 19059 |
Article Category | Article |
Authors | |
Author | Deegan, Craig |
Journal Title | Accounting and Finance |
Journal Citation | 37 (1), pp. 1-40 |
Number of Pages | 40 |
Year | 1997 |
Publisher | John Wiley & Sons |
Place of Publication | Melbourne, Australia |
ISSN | 0810-5391 |
1467-629X | |
Digital Object Identifier (DOI) | https://doi.org/10.1111/j.1467-629X.1997.tb00312.x |
Web Address (URL) | http://onlinelibrary.wiley.com/doi/10.1111/j.1467-629X.1997.tb00312.x/pdf |
Abstract | This paper investigates the contractual relationship between the manager and the firm. The results indicate that cross-sectional variation in the components of management remuneration plans can be explained by variations in the specificity of both the manager's human capital investments and the firm's resources. Where the returns on the firm's resources are relatively more dependent upon (specific to) a particular manager, that manager is more likely to be able to negotiate his/her remuneration. The manager is also more likely to be paid on a long run contingent basis and to be offered deferred forfeitable remuneration. The results also indicate that the greater the firm-specificity of a manager's human capital investments the greater the likelihood that the manager is offered termination compensation as part of the remuneration package. |
Keywords | asset specificity; attract; management remuneration plan; motivate; retain |
ANZSRC Field of Research 2020 | 529999. Other psychology not elsewhere classified |
350503. Human resources management | |
480699. Private law and civil obligations not elsewhere classified | |
Public Notes | File reproduced in accordance with the copyright policy of the publisher/author. |
Byline Affiliations | School of Accounting, Economics and Finance |
Institution of Origin | University of Southern Queensland |
https://research.usq.edu.au/item/q05q7/efficient-management-remuneration-plan-design-a-consideration-of-specific-human-capital-investments
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