This exercise requires students to work in small teams to determine executive pay for an actual CEO. The exercise illustrates several relevant theories of executive compensation, and may comprise one 75-minute class session or be divided into two parts.
Get full access to this article
View all access options for this article.
References
1.
zerman, M. H.
, Schoorman, F. D. (1983). Alimited rationality model of interlocking directorates. Academy of Management Review, 8(2), 206-217.
2.
Crystal, G. S.
(1991). In search of excess: The overcompensation of American executives. New York: W. W. Norton.
3.
Gale Research Inc.
(1995). Ward’s business directory (Vol. 4). New York: ITP.
4.
Jensen, M. C.
, Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3, 305-360.
5.
Milgrom, P.
, Roberts, J. (1992). Economics, organization and management. Englewood Cliffs, NJ: Prentice Hall.
6.
Murphy, K. J.
(1986). Top executives are worth every nickel they get. Harvard Business Review, 64(2), 125-132.
7.
O’Reilly
, C. A. III, Main, B. G., Crystal, G. S. (1988). CEO compensation as tournament and social comparison: A tale of two theories. Administrative Science Quarterly, 33, 257-274.
8.
Reference book of corporate managements. (1998). Bethlehem, PA: Dun Bradstreet.
9.
Reingold, J.
(1997, April 21). How high can CEO pay go?Business Week, p. 158-158.
10.
Walsh J. P.
, Seward, J. K. (1990). On the efficiency of internal and external corporate control mechanisms. Academy of Management Review, 15(3), 421-458.
11.
Zahra, S. A.
, Pearce, J. A. (1989). Boards of directors and corporate financial performance: A review and integrative model. Journal of Management, 15(2), 291-334.
