Comments on Shan and Walter: towards a set of design principles for executive compensation contracts

Stacey Beaumont, Raluca Ratiu, David Reeb, Glenn Boyle, Philip Brown, Alexander Szimayer, Raymond da Silva Rosa, David Hillier, Patrick McColgan, Athanasios Tsekeris, Bryan Howieson, Zoltan Matolcsy, Helen Spiropoulos, John Roberts, Tom Smith, Qing Zhou, Peter Swan, Stephen Taylor, Sue Wright, David Yermack

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

This paper is developed around the set of design principles for executive compensation contracts as outlined in the study of Shan and Walter (2014). We propose guidance for determining an appropriate CEO starting compensation level based on past performance and the market for managerial talent. We also outline factors to be considered in determining annual changes to CEO compensation. This paper argues that stock options and restricted stock grants should become exercisable only upon meeting both time and performance criteria against an appropriate benchmark peer group. We agree with Shan and Walter’s (2014) recommendations regarding termination payments and make suggestions on how to apply these recommendations in practice.
LanguageEnglish
Pages685-771
Number of pages87
JournalAbacus
Volume52
Issue number4
DOIs
Publication statusPublished - 29 Dec 2016

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Design principles
Executive compensation
Chief executive officer
Factors
Guidance
Peer group
Stock options
Restricted stock
CEO compensation
Benchmark
Payment
Performance criteria
Termination

Keywords

  • CEO compensation
  • shareholders
  • compensation elements

Cite this

Beaumont, S., Ratiu, R., Reeb, D., Boyle, G., Brown, P., Szimayer, A., ... Yermack, D. (2016). Comments on Shan and Walter: towards a set of design principles for executive compensation contracts. Abacus, 52(4), 685-771. https://doi.org/10.1111/abac.12091
Beaumont, Stacey ; Ratiu, Raluca ; Reeb, David ; Boyle, Glenn ; Brown, Philip ; Szimayer, Alexander ; da Silva Rosa, Raymond ; Hillier, David ; McColgan, Patrick ; Tsekeris, Athanasios ; Howieson, Bryan ; Matolcsy, Zoltan ; Spiropoulos, Helen ; Roberts, John ; Smith, Tom ; Zhou, Qing ; Swan, Peter ; Taylor, Stephen ; Wright, Sue ; Yermack, David. / Comments on Shan and Walter : towards a set of design principles for executive compensation contracts. In: Abacus. 2016 ; Vol. 52, No. 4. pp. 685-771.
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Beaumont, S, Ratiu, R, Reeb, D, Boyle, G, Brown, P, Szimayer, A, da Silva Rosa, R, Hillier, D, McColgan, P, Tsekeris, A, Howieson, B, Matolcsy, Z, Spiropoulos, H, Roberts, J, Smith, T, Zhou, Q, Swan, P, Taylor, S, Wright, S & Yermack, D 2016, 'Comments on Shan and Walter: towards a set of design principles for executive compensation contracts' Abacus, vol. 52, no. 4, pp. 685-771. https://doi.org/10.1111/abac.12091

Comments on Shan and Walter : towards a set of design principles for executive compensation contracts. / Beaumont, Stacey; Ratiu, Raluca; Reeb, David; Boyle, Glenn; Brown, Philip; Szimayer, Alexander; da Silva Rosa, Raymond; Hillier, David; McColgan, Patrick; Tsekeris, Athanasios; Howieson, Bryan; Matolcsy, Zoltan; Spiropoulos, Helen; Roberts, John; Smith, Tom; Zhou, Qing; Swan, Peter; Taylor, Stephen; Wright, Sue; Yermack, David.

In: Abacus, Vol. 52, No. 4, 29.12.2016, p. 685-771.

Research output: Contribution to journalArticle

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Beaumont S, Ratiu R, Reeb D, Boyle G, Brown P, Szimayer A et al. Comments on Shan and Walter: towards a set of design principles for executive compensation contracts. Abacus. 2016 Dec 29;52(4):685-771. https://doi.org/10.1111/abac.12091