Executive pay in Japan: The role of bank-appointed monitors and the main bank relationship

Naohito Abe, Noel Gaston, Katsuyuki Kubo

研究成果: Article査読

17 被引用数 (Scopus)

抄録

A feature of tournament models is that executive compensation is not independent of the wages paid at lower levels of the corporate hierarchy. Agency models show that compensation based on firm performance is a means by which incentives can be provided to executives once a promotion tournament has been resolved. In this paper, we combine elements of both models and show that the existence of an outsider who monitors the firm's activities will lower the sensitivity of pay to firm performance for top executives and reduce the importance of tournament-based incentives. Using panel data for 55 Japanese electronics firms, we find support for the notion that bank-appointed Board members help monitor top executives and that tournament considerations are a particularly important feature of executive compensation in Japan.

本文言語English
ページ(範囲)371-394
ページ数24
ジャーナルJapan and The World Economy
17
3
DOI
出版ステータスPublished - 2005 8

ASJC Scopus subject areas

  • 財務
  • 経済学、計量経済学
  • 政治学と国際関係論

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