The Governance of Executive Remuneration during the Crisis: Evidence from Italy

  • Marcello Bianchi
  • Angela Ciavarella
  • Valerio Novembre
  • Rossella Signoretti
Part of the Palgrave Macmillan Studies in Banking and Financial Institutions book series (SBFI)


Executive remuneration has long been considered a key variable of corporate governance in that it can allow a better alignment of the management’s interests with those of the shareholders. In a context of asymmetric information, the optimal contracting theory suggests that an efficient remuneration contract, namely one with a fine-tuned mix of fixed and variable components, might effectively overcome agency problems (Jensen and Meckling, 1976; Fama and Jensen, 1983; Jensen and Murphy, 1990). However, recent scandals have indicated that when it comes to the real world these theoretical predictions are not always grounded. Actually, the competing rent extraction view has shown a strong explanatory power by hypothesizing that managers are able to influence the pay process for their own benefit (La Porta et al., 1999; Bebchuk et al., 2002; Bebchuk and Fried, 2006).


Corporate Governance Institutional Investor Stock Option Executive Compensation Board Size 
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Copyright information

© Marcello Bianchi, Angela Ciavarella, Valerio Novembre and Rossella Signoretti 2011

Authors and Affiliations

  • Marcello Bianchi
  • Angela Ciavarella
  • Valerio Novembre
  • Rossella Signoretti

There are no affiliations available

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