Settling up in CEO compensation: The impact of divestiture intensity and contextual factors in refocusing firms

Seemantini Madhukar Pathak · Robert E. Hoskisson · Richard A. Johnson

81 citations0/0 files storedStrategic Management Journal

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Human Resource and Talent Management Organizational Management and Leadership

Abstract

We examine the relationship between strategic change and CEO compensation by studying how a firm's refocusing program influences CEO compensation after completing the change. We contribute to the ‘settling up’ literature by arguing that strategic change is often uncertain for both the CEO and the board of directors responsible for executive compensation. As such the firm is likely to settle up with the CEO by paying for compensation risk and effort undertaken during refocusing after the extent and impact of strategic change are better known. We find that refocusing intensity is positively related to post‐refocusing CEO total compensation, suggesting that ‘settling up’ through post hoc compensation is an important factor in strategic change. We also find that prior firm performance, governance structure and industry dynamism are important moderators of this relationship . © 2013 John Wiley & Sons, Ltd.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 81 citations exist upstream.

References

1979Prospect Theory: An Analysis of Decision under Risk 1988Prospect theory: An analysis of decision under risk 1989Agency Theory: An Assessment and Review 1980Agency Problems and the Theory of the Firm 1978Organizational Strategy, Structure, and Process 1988Outside directors and CEO turnover 1984Dimensions of Organizational Task Environments 1999Managerial Incentive Problems: A Dynamic Perspective

Cited by

2020Strategic Leadership Systems: Viewing Top Management Teams and Boards of Directors from A Multiteam Systems Perspective 2017Central Perspectives and Debates in Strategic Change Research 2021Performance feedback and firms’ relative strategic emphasis: The moderating effects of board independence and media coverage 2019Placing their bets: The influence of strategic investment on CEO pay‐for‐performance 2020A tiger with wings: CEO–board surname ties and agency costs 2016CEO incentive compensation and earnings management

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.