Achieving Pay for Performance
In a Conference Board Director Note, Steve O’Byrne shows how to use historical pay data to measure the three basic dimensions of pay for performance: pay leverage to relative TSR, pay alignment with relative TSR and pay premium at industry average performance. He shows that the leverage and alignment of top management pay has changed little since the mid-1990's. He also shows that a simple pay plan with annual grants of performance shares will provide perfet pay for performance if two conditions are met.
What
Investors Need to Know about Executive Pay
In
a Journal of Investing article on "What Investors Need to
Know about Executive Pay" Steve O'Byrne and David Young show how
investors can calculate comprehensive measures of top management's incentive
to increase shareholder value and its incentive for value-less revenue
growth. They explain the flaws of the conventional approach to executive
pay and present their research on the impact of top management "wealth
leverage" on company performance.
Listen
to O’Byrne’s 5 minute video summary on the Journal of Investing website (click tab #2 on the lower right of the video panel in the center
of the Journal’s web page).
The Impact of Top Management Incentives on Corporate
Performance
In a Journal of Applied Corporate Finance article, Steve O’Byrne and David Young explain the concept of wealth leverage, show how compensation practices affect wealth leverage and present research on the impact of wealth leverage on company performance.
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