CEOs
- 1 September 2009
- journal article
- Published by Annual Reviews in Annual Review of Economics
- Vol. 1 (1), 121-150
- https://doi.org/10.1146/annurev.economics.050708.143301
Abstract
This article starts with an overview of the characteristics of chief executive officers (CEOs). I discuss the rising importance of general skills over firm-specific skills and the growing share of externally recruited CEOs. I also discuss possible reasons for the underrepresentation of women and the overrepresentation of family members in the corporate suite. I then review the three main explanations that have been put forward to explain the surge in CEO compensation over the past 30 years: principal-agent view, rent extraction view, and market-based view. I assess the strengths and weaknesses of each of these explanations in light of the existing empirical research. Finally, I review work on how entrenched CEOs or cognitively biased CEOs may cause corporate practices to deviate from the maximization of firm value.Keywords
This publication has 86 references indexed in Scilit:
- Does Corporate Governance Matter in Competitive Industries?SSRN Electronic Journal, 2007
- Do CEOs Matter?SSRN Electronic Journal, 2007
- Diagnosing Discrimination: Stock Returns and Ceo GenderJournal of the European Economic Association, 2006
- The Evolution of Top Incomes: A Historical and International PerspectiveAmerican Economic Review, 2006
- Does Overconfidence Affect Corporate Investment? CEO Overconfidence Measures RevisitedEuropean Financial Management, 2005
- The Trouble with Stock OptionsJournal of Economic Perspectives, 2003
- Regulating Executive Pay: Using the Tax Code to Influence Chief Executive Officer CompensationJournal of Labor Economics, 2002
- Internal Monitoring Mechanisms and CEO Turnover: A Long‐Term PerspectiveThe Journal of Finance, 2001
- Is there Discretion in Wage Setting? A Test Using Takeover LegislationThe RAND Journal of Economics, 1999
- Managerial myopia: Self-serving biases in organizational planning.Journal of Applied Psychology, 1977