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Journal of Management and Governance

, Volume 6, Issue 3, pp 189–214 | Cite as

Executive Discretion and Corporate Performance as Determinants of CEO Compensation, Contingent on External Monitoring Activities

  • Peter Wright
  • Mark Kroll
Article

Abstract

In this paper we discuss the potential impactof managerial discretion and firm performanceon CEO compensation, contingent on the extentof monitoring activities. We argue that CEOcompensation may be positively related toexecutive discretion and corporate performancefor firms that have vigilant external monitors. We alternatively contend that CEO compensationmay neither be associated with discretion norperformance for firms with passive externalmonitors. The empirical results are supportiveof our contentions.

CEO compensation corporate performance executive discretion 

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Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  1. 1.Fogelman College of Business and EconomicsThe University of MemphisMemphisU.S.A.
  2. 2.College of Administration and BusinessLouisiana Tech UniversityRustonU.S.A.

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