Compensation and Firm Performance

Abstract

The relatlons,ip between the ceneatlon policies a fin, pura.s and the fin's economic performance i of central hortance to both researchers and practitioners.Yet, wt.ile a variety of theories exist about the effects of variate .ensation policies, Mirprisingly little evidence exIsts a,. the extent to which ceneation policies vary across fire and, e inortantly, on th, effect. of pursiing alternative ccensatjon strategies.This paper attewts to anarize the aval able evidence, drawing on research from the economics, finance, and personnel literatures.It also lays out an agenda for future research.

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