HOW MUCH DOES THE CEO MATTER? THE ROLE OF MANAGERIAL DISCRETION IN THE SETTING OF CEO COMPENSATION.
Academy of Management JournalPublished 1 April 1998
Sydney Finkelstein, Brian Boyd
Citations750
SJR quartileQ1
SJR score10.53
SNIP3.95
Generate an AI Snapshot to get a quick, structured summary of this paper.
Study Snapshot
ObjectiveStudy objective
MethodsResearch methodology
PopulationPopulation studied
Sample sizeSample sizes
OutcomesStudy outcomes here
ResultsStudy results comes here
LimitationsResearch study limitations comes here
A concise AI-generated summary of the paper will appear here once you click Generate AI Snapshot.
Abstract
The idea that managerial discretion—defined as latitude of action—may be an important determinant of CEO compensation has been recognized for some time. However, in spite of considerable work that ...
Keywords
Business, Management and Accounting
Journal of Financial EconomicsTheory of the firm: Managerial behavior, agency costs and ownership structure
70,674 Citations1976Michael C. Jensen, William H. Meckling
Journal of Political EconomyThe Pricing of Options and Corporate Liabilities
29,429 Citations1973Fischer Black, Myron S. Scholes
Contemporary Sociology A Journal of ReviewsStructural Equations with Latent Variables.
17,606 Citations1991Clifford C. Clogg, Kenneth A. Bollen
External Control of Organizations: Resource Dependence Perspective
14,343 Citations2011
Journal of Political EconomyAgency Problems and the Theory of the Firm
10,479 Citations1980Eugene F. Fama
Academy of Management ReviewAgency Theory: An Assessment and Review
9,379 Citations1989Kathleen M. Eisenhardt
American Journal of SociologyThe Population Ecology of Organizations
7,405 Citations1977Michael T. Hannan, John H. Freeman
The Journal of FinanceIndustrial Market Structure and Economic Performance.
6,393 Citations1971H. Michael Mann, F. M. Scherer
Operational Research Quarterly (1970-1977)The Nature of Managerial Work
6,346 Citations1974B. E. Partridge, Henry Mintzberg
Journal of Financial EconomicsOutside directors and CEO turnover
4,400 Citations1988Michael S. Weisbach
Journal of Financial EconomicsThe investment opportunity set and corporate financing, dividend, and compensation policies
3,778 Citations1992Clifford W. Smith, Ross L. Watts
Academy of Management ReviewOrganizational Culture: Can It Be a Source of Sustained Competitive Advantage?
3,150 Citations1986Jay B. Barney
Industrial Market Structure and Economic Performance
2,628 Citations1990F. M. Scherer, David Gaddis Ross
Academy of Management JournalPOWER IN TOP MANAGEMENT TEAMS: DIMENSIONS, MEASUREMENT, AND VALIDATION.
2,156 Citations1992Sydney Finkelstein
A set of dimensions measuring top managers' power are presented and a measurement methodology is suggested to facilitate empirical inquiry to demonstrate strong support for the proposed power dimensions.
Administrative Science QuarterlyTop-Management-Team Tenure and Organizational Outcomes: The Moderating Role of Managerial Discretion
2,129 Citations1990Sydney Finkelstein, Donald C. Hambrick
Bulletin of Miscellaneous Information (Royal Gardens Kew)The Concept of Fit in Strategy Research: Towards Verbal and Statistical Correspondence
2,058 Citations2018N. Venkatraman
Strategic Management JournalStrategy‐making and environment: The third link
1,973 Citations1983Danny Miller, Peter H. Friesen
It is hypothesized that increases in environmental dynamism, hostility and heterogeneity should be related to specific changes in the amount of analysis and innovation which characterizes strategy-making activity.
Journal of Accounting and EconomicsCorporate performance and managerial remuneration
1,793 Citations1985Kevin J. Murphy
The Journal of FinanceCompensation and Incentives: Practice vs. Theory
1,750 Citations1988George P. Baker, Michael C. Jensen +1 more
Journal of Accounting and EconomicsAdditional evidence on the association between the investment opportunity set and corporate financing, dividend, and compensation policies
1,303 Citations1993Jennifer J. Gaver, Kenneth M. Gaver
Academy of Management JournalTOP MANAGEMENT TEAM SIZE, CEO DOMINANCE, AND FIRM PERFORMANCE: THE MODERATING ROLES OF ENVIRONMENTAL TURBULENCE AND DISCRETION.
1,098 Citations1993Jerayr Haleblian, S. Finikelstein
Strategic Management JournalTop executive commitment to the status quo: Some tests of its determinants
1,076 Citations1993Donald C. Hambrick, Marta A. Geletkanycz +1 more
Results suggest that an executive's tenure in an industry is a pronounced determinant of CSQ, and has significantly more impact than organizational tenure, and the firm's current performance was found to be positively related to CSQ.
Academy of Management ReviewOn the Efficiency of Internal and External Corporate Control Mechanisms
1,059 Citations1990James P. Walsh, James K. Seward
Strategic Management JournalChief executive scanning, environmental characteristics, and company performance: An empirical study
1,053 Citations1988Richard L. Daft, Juhani Sormunen +1 more
The findings suggest that customer, economic and competitor sectors generated greater strategic uncertainty than technological, regulatory and sociocultural sectors.
Administrative Science QuarterlyManagerial Incentives, Monitoring, and Risk Bearing: A Study of Executive Compensation, Ownership, and Board Structure in Initial Public Offerings
996 Citations1994Randolph P. Beatty, Edward J. Zajac
Strategic Management JournalCorporate linkages and organizational environment: A test of the resource dependence model
859 Citations1990Brian Boyd
A struictural model was developed to determine whether corporate boards respond to different types of environmental uncertainty, and it was found that boards tended to be smaller in a more uncertain environient, while having an increased nunmber of interlocks.
Commitment: The Dynamic of Strategy
838 Citations1991Pankaj Ghemawat, C. J.C. Roberts
Strategic Management JournalBoard control and ceo compensation
833 Citations1994Brian Boyd
Although, as hypothesized, CEO salaries were greater in firms with lower levels of control, CEO compensation was not significantly related to firm size or profitability.
Administrative Science QuarterlySubstance and Symbolism in CEOs' Long-Term Incentive Plans
782 Citations1994James D. Westphal, Edward J. Zajac
Strategic Management JournalChief executive compensation: A study of the intersection of markets and political processes
756 Citations1989Sydney Finkelstein, Donald C. Hambrick
The study finds that CEO pay has complex links to several factors: firm size, complexity, performance, CEO power, board vigilance, and the CEO's human capital.
Administrative Science QuarterlyCEO Compensation as Tournament and Social Comparison: A Tale of Two Theories
721 Citations1988Charles A. O’Reilly, Brian G. M. Main +1 more
Administrative Science QuarterlyCorporate Attributions as Strategic Illusions of Management Control
701 Citations1984Gerald R. Salancik, James R. Meindl
Administrative Science QuarterlyThe Decoupling of CEO Pay and Performance: An Agency Theory Perspective
690 Citations1989Henry L. Tosi, Luis R. Gómez‐Mejía
Academy of Management JournalSTRATEGY, CONTROL SYSTEMS, AND RESOURCE SHARING: EFFECTS ON BUSINESS-UNIT PERFORMANCE.
633 Citations1990Vijay Govindarajan, Julie Fisher
Administrative Science QuarterlyThe Structure of Organizational Incentives
630 Citations1993Richard A. Lambert, David F. Larcker +1 more
Administrative Science QuarterlyCrisis and the Content of Managerial Communications: A Study of the Focus of Attention of Top Managers in Surviving and Failing Firms
603 Citations1990Richard A. D'Aveni, Ian C. MacMillan
Academy of Management ReviewConstruct Measurement in Organizational Strategy Research: A Critique and Proposal
601 Citations1986N. Venkatraman, John H. Grant
This paper critically reviews the state of construct measurement in organizational strategy research, develops a set of key criteria specifically for strategy measurement, and proposes some recommendations for integrating strategy concepts with their measures.
Journal of ManagementIndustry Effects and Strategic Management Research
583 Citations1990Gregory G. Dess, R. Duane Ireland +1 more
Journal of Accounting and EconomicsStock-based incentive compensation and investment behavior
512 Citations1993John M. Bizjak, James A. Brickley +1 more
Journal of Financial EconomicsExecutive pay and performance Evidence from the U.S. banking industry
510 Citations1995R. Glenn Hubbard, Darius Palia
Journal of Accounting and EconomicsCEO compensation: The role of individual performance evaluation
499 Citations1996Robert M. Bushman, Raffi Indjejikian +1 more
Administrative Science QuarterlyAccounting for the Explanations of CEO Compensation: Substance and Symbolism
493 Citations1995Edward J. Zajac, James D. Westphal
Journal of Accounting and EconomicsThe investment opportunity set and accounting procedure choice
467 Citations1993Douglas J. Skinner
Compensation, Organizational Strategy, and Firm Performance
467 Citations1992Luis R. Gómez‐Mejía, David B. Balkin
Academy of Management JournalASSESSING MANAGERIAL DISCRETION ACROSS INDUSTRIES: A MULTIMETHOD APPROACH.
461 Citations1995Donald C. Hambrick, Eric Abrahamson
Journal of Accounting and EconomicsInvestment opportunities and the structure of executive compensation
461 Citations1996William R. Baber, Surya Janakiraman +1 more
Academy of Management ReviewDivergence between Archival and Perceptual Measures of the Environment: Causes and Consequences
436 Citations1993Brian Boyd, Gregory G. Dess +1 more
Econometric Models, Techniques, and Applications
434 Citations1996Michael D. Intriligator, Ronald G. Bodkin +1 more
Strategic Management JournalIndustry influences on strategy reformulation
424 Citations1982Anne Sigismund Huff
The industry group is described as a particularly important arena in which niche-related problems and solutions are identified and tested and the contribution of ‘borrowed experience’ to strategy reformulation is emphasized.
Academy of Management JournalTurnaround Strategies for Mature Industrial-Product Business Units.
417 Citations1983D. C. Hambrick, Steven M. Schecter
Journal of ManagementReframing Execufive Compensation: An Assessment and Outlook
405 Citations1997Luis R. Gómez‐Mejía, Robert M. Wiseman
Strategic Management JournalMatching compensation and organizational strategies
376 Citations1990David B. Balkin, Luis R. Gómez‐Mejía
The findings are supportive of congruency notions which suggest that the effectiveness of the compensation system is partly a function of the fit between pay strategies and organizational strategies.
eCommons (Cornell University)Employee Compensation: Research and Practice
364 Citations1992Barry Gerhart, George T. Milkovich
The RAND Journal of EconomicsExecutive Effort and Selection of Risky Projects
347 Citations1986Richard A. Lambert
Strategic Management JournalChief executive compensation: A synthesis and reconciliation
344 Citations1988Sidney Finkelstein, Donald C. Hambrick
The central thesis is that CEO pay is at once both more and less ‘sensible’ than its critics and architects, respectively, contend.
Organization ScienceManagerial Incentives and Investment in R&D in Large Multiproduct Firms
339 Citations1993Robert E. Hoskisson, Michael A. Hitt +1 more
Strategic Management JournalStrategic orientations, incentive plan adoptions, and firm performance: evidence from electric utility firms
328 Citations1997Nandini Rajagopalan
Journal of Management StudiesFIELD RESEARCH METHODS IN STRATEGIC MANAGEMENT: CONTRIBUTIONS TO THEORY BUILDING AND TESTING*
321 Citations1994Charles C. Snow, James B. Thomas
The overall conclusion is that field research methods will continue to be used heavily to develop strategy theory, however, certain conditions must be met to maximize the contribution of field methods to strategy research.
American Economic ReviewManagerial Pay and Corporate Performance
312 Citations1970Wilbur G. Lewellen, Blaine Huntsman
Strategic Management JournalToward a contingency theory of compensation strategy
304 Citations1987David B. Balkin, Luis R. Gómez‐Mejía
Academy of Management JournalInformation-Processing Demands as a Determinant of Ceo Compensation
286 Citations1996Andrew D. Henderson, James W. Fredrickson
Strategic Management JournalStructure and process of diversification, compensation strategy, and firm performance
282 Citations1992Luis R. Gómez‐Mejía
Results generally support the notion that a firm's compensation strategies make a greater contribution to firm performance if these are attuned to extent and process of corporate diversification.
Journal of Financial EconomicsIncentives, downsizing, and value creation at general dynamics,
243 Citations1995Jay Dial
Strategic Management JournalPERCEIVED MANAGERIAL DISCRETION: A STUDY OF CAUSE AND EFFECT
216 Citations1997Mason A. Carpenter, Brian Golden
Journal of ManagementThe Role of Risk in Executive Compensation
215 Citations1997Samuel R. Gray, Albert A. Cannella
Industrial and Labor Relations ReviewDeterminants of Chief Executive Officer Compensation
212 Citations1988John R. Deckop
Academy of Management JournalCEO CHARACTERISTICS: DOES INDUSTRY MATTER?
212 Citations1996Nandini Rajagopalan, Deepak K. Datta
Medical Entomology and ZoologyIndustrial Economics and Organization: Theory and Evidence
206 Citations1991Donald A. Hay, Derek Morris
Strategic Management JournalEffects of strategic orientation and environmental change on senior management reward systems
204 Citations1992Nandini Rajagopalan, Sydney Finkelstein
This paper develops a framework that relates differences in strategic orientations and environmental conditions to four factors–availability of multiple options, programability of behavior, cause–effect ambiguity and outcome uncertainty, and finds that firms with more discretionary strategic orientation offer greater compensation.
Academy of Management JournalDIVERSIFICATION STRATEGIES AND MANAGERIAL REWARDS: AN EMPIRICAL STUDY.
199 Citations1985J. L. Kerr
Academy of Management JournalINCREASED ENVIRONMENTAL UNCERTAINTY AND CHANGES IN BOARD LINKAGE PATTERNS.
192 Citations1990James R. Lang, Daniel E. Lockhart
The Journal of FinanceAgency, Delayed Compensation, and the Structure of Executive Remuneration
181 Citations1983Jonathan Eaton, Harvey S. Rosen
The Quarterly Journal of EconomicsA General Theory of Executive Compensation Based on Statistically Tested Propositions
178 Citations1956David R. Roberts
Research PolicyIndustry recipes: The nature and sources of managerial judgement
167 Citations1992Scott Moss
Strategic Management JournalStrategy content and the research process: A critique and commentary
137 Citations1989Cynthia A. Montgomery, Birger Wernerfelt +1 more
It is argued that strategy content research would benefit from more carefully developed theoretical work; more theory-driven data analysis; and less emphasis on the immediate applicability of results.
The Review of Economics and StatisticsUsing the H-Index of Concentration with Published Data
134 Citations1977Richard Schmalensee
Journal of Accounting ResearchMeasuring Executive Compensation: Methods and an Application
125 Citations1985Rick Antle, Abbie J. Smith
Journal of ManagementDeterminants of Top Management Compensation: Explaining the Impact of Economic, Behavioral, and Strategic Constructs and the Moderating Effects of Industry
81 Citations1990Nandini Rajagopalan, John E. Prescott
The Journal of High Technology Management ResearchThe effects of research and development intensity on managerial compensation in large organizations
77 Citations1991George T. Milkovich, Barry Gerhart +1 more
Conditions for Confirmatory Analysis and Causal Inference.
69 Citations1982Lawrence R. James, Stanley A. Mulaik +1 more
Journal of Management Accounting ResearchIncentive Compensation Design, Strategic Business Unit Mission, and Competitive Strategy.
56 Citations1993Joseph G. Fisher, Vijay Govindarajan
The Review of Economics and StatisticsThe Effects of Regulation on Executive Compensation
47 Citations1982Thomas M. Carroll, David H. Ciscel
Financial ManagementThe Relationship between Corporate Compensation Policies and Investment Opportunities: Empirical Evidence for Large Bank Holding Companies
44 Citations1995Michael Collins, David W. Blackwell +1 more
Journal of Accounting and EconomicsManagement compensation and the managerial labor market an overview
40 Citations1985Artur Raviv
…
