Executive compensation: Aligning shareholders’ and managers’ interests
The nine papers in this volume provide direct and indirect evidence on the
incentive effects of executive compensation packages. The papers are grouped into
the following five subject areas: (1) relation between compensation and firm
performance, (2) effects of bonus plans on accounting choices, (3) stock price
Jensen and Zimmerman 3 1985
reaction to executive contract changes, (4) stock price reaction to executive deaths,
and (5) compensation incentives and mergers and acquisitions. For expanded
summaries of most of the papers, the reader is referred to the discussants’ comments
and to the concluding overview by Artur Raviv (1985).