In this study, I examine the extent to which firms rely on relative performance evaluation (RPE) when setting executive compensation. In particular, I examine whether firms use information about peer performance to determine compensation at the end of the year, i.e. after both firm and peer performance are observed. I find that RPE is most pronounced for firms that allow little or no scope for ex post subjective adjustments to annual bonuses. Conversely, firms that rely mainly on subjectivity in determining bonus exhibit little use of RPE.
Download count: 0
- Partial requirement for: Ph. D., Arizona State University, 2013Note typethesis
- Includes bibliographical references (p. 24-26)Note typebibliography
- Field of study: Accountancy