The impact of strategic persistence on executive compensation

Wayne Grossman, Albert A. Cannella

Research output: Contribution to journalArticle

21 Scopus citations

Abstract

This study investigates whether different participants in corporate governance reward strategic persistence through executive compensation. Internal participants (inside directors, CEOs/chairs, and corporate officers who own a significant proportion of company stock) are expected to favor stability and therefore reward persistence, whereas external participants (large block shareholders) are predicted to favor change and therefore penalize persistence. Results suggest that the presence of CEOs/chairs leads to rewarding strategic persistence with total compensation. Inside directors also appear to reward persistence with fixed compensation. Large external shareholders, contrary to expectations, seem to reward persistence with higher levels of fixed compensation.

Original languageEnglish (US)
Pages (from-to)257-278
Number of pages22
JournalJournal of Management
Volume32
Issue number2
DOIs
StatePublished - Apr 1 2006

Keywords

  • Corporate governance
  • Executive compensation
  • Strategic persistence

ASJC Scopus subject areas

  • Finance
  • Strategy and Management

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