CEOs´ MONETARY INCENTIVES AND PERFORMANCE OF MEXICAN FIRMS

Corporate Board: Role, Duties & Composition

Karen Watkins-Fassler¹ 

关键词: Self-Determination Theory;    Agency Theory;    Monetary Incentives;    Firm Performance;    Emerging Markets;   

DOI  :  10.22495/cbv13i1p4

学科分类：社会科学、人文和艺术（综合）

来源: Virtus Interpress

【 摘 要 】

This paper analyzes if changes in CEO remuneration and the execution of CEO stock options impact firm performance, under an emerging market context. Data is obtained from 88 non-financial companies listed in the Mexican Stock Exchange (2001-2012). A dynamic panel specification is employed, and regressions are run through the Generalized Method of Moments. Some evidence is found on the negative relationship between flat monetary incentives and Mexican firm performance, specifically for normal times. In addition, financial incentives based on results (particularly CEO stock options) do not imply higher firm performance. Results suggest that companies in particular contexts should move towards the development of CEOs, more than promoting mostly monetary incentives for boosting firm performance. Companies operating in Mexico will gain from hiring intrinsically motivated CEOs, together with testing different extrinsic rewards (neither flat nor stock options) in order to attain additive effects on intrinsic motivation.

【 授权许可】

CC BY-NC