Moral Hazard and Adverse Selection of Executive Compensation

This dissertation investigates the structure of incentive contracts in which adverse selection problems are more severe. Specifically, I examine the moderating effect of R&D intensity on the relative weights placed on signals of ability and on performance measures in executive compensation. Furthermore, I also investigate the determinants on the compensation of university presidents. I find that that more weight is placed on signals of ability in R&D intensive firms and less weight is placed on performance measures. I find that R&D intensive firms pay more to executives with technical work experience and/or relevant educational degrees. Additionally, in the context of university presidents, the positive association between organizational complexity and executive compensation is driven by the role of managerial ability rather than by effort. This result also suggests that considering measures of organizational complexity (such as firm size and diversification) as control variables in empirical studies of executive compensation is the appropriate means by which to account for the impact of organizational complexity.

Grantor dc:publisher

Temple University. Libraries

Year dc:date.issued

2010

Author dc:creator

• Xian, Chunwei

Advisor dc:contributor.advisor

• Banker, Rajiv D.

Committee members dc:contributor.committeemember

• Plehn-Dujowich, Jose M.
• Krishnan, Jayanthi
• Naveen, Lalitha

• Business Administration, Accounting
• Adverse Selection
• Executive Compensation
• Moral Hazard
• R & D Intensity

Statement dc:rights

• IN COPYRIGHT- This Rights Statement can be used for an Item that is in copyright. Using this statement implies that the organization making this Item available has determined that the Item is in copyright and either is the rights-holder, has obtained permission from the rights-holder(s) to make their Work(s) available, or makes the Item available under an exception or limitation to copyright (including Fair Use) that entitles it to make the Item available.

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Language dc:language.iso

eng

Dc Identifier Other

864885014

OAI identifier oai:identifier

oai:scholarshare.temple.edu:20.500.12613/3860