Does codetermination affect the composition of variable versus fixed parts of executive compensation?

Arbeitspapier

Contrary to previous literature we hypothesize that interests of labor may well - like that of shareholders - aim at securing the long-run survival of the firm. Consequently, employee representatives on the supervisory board could well have an interest in increasing incentive-based compensation to avoid excessive risk taking and short-run orientated decisions. We compile unique panel data on executive compensation over the periods 2006 to 2011 for 405 listed companies and use a Hausman-Taylor approach to estimate the effect of codetermination on the compensation design. Finally, codetermination has a significantly positive effect on performance-based components of compensation, which supports our hypothesis.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 15-053

Classification and Topics

• Classification: Wirtschaft ; Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining ; Firm Objectives, Organization, and Behavior: General ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Personnel Management; Executives; Executive Compensation ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
• Subject: Executive Compensation ; Codetermination ; Principal-Agent Theory ; Corporate Governance ; Hausman-Taylor

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dyballa, Katharina ; Kraft, Kornelius
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/114173
• URN: urn:nbn:de:bsz:180-madoc-396746
• Last update: 10.03.2025, 11:45 AM CET