Efficient management remuneration plan design: a consideration of specific human capital investments

Deegan, Craig (1997) Efficient management remuneration plan design: a consideration of specific human capital investments. Accounting and Finance, 37 (1). pp. 1-40. ISSN 0810-5391


This paper investigates the contractual relationship between the manager and the firm. The results indicate that cross-sectional variation in the components of management remuneration plans can be explained by variations in the specificity of both the manager's human capital investments and the firm's resources. Where the returns on the firm's resources are relatively more dependent upon (specific to) a particular manager, that manager is more likely to be able to negotiate his/her remuneration. The manager is also more likely to be paid on a long run contingent basis and to be offered deferred forfeitable remuneration. The results also indicate that the greater the firm-specificity of a manager's human capital investments the greater the likelihood that the manager is offered termination compensation as part of the remuneration package.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Published version deposited in accordance with the copyright policy of the publisher.
Faculty / Department / School: Historic - Faculty of Business - Department of Accounting
Date Deposited: 30 Nov 2007 11:47
Last Modified: 27 Aug 2013 05:12
Uncontrolled Keywords: asset specificity; attract; management remuneration plan; motivate; retain
Fields of Research : 17 Psychology and Cognitive Sciences > 1701 Psychology > 170109 Personality, Abilities and Assessment
15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150305 Human Resources Management
18 Law and Legal Studies > 1801 Law > 180105 Commercial and Contract Law
Socio-Economic Objective: B Economic Development > 91 Economic Framework > 9102 Microeconomics > 910202 Human Capital Issues
Identification Number or DOI: 10.1111/j.1467-629X.1997.tb00312.x
URI: http://eprints.usq.edu.au/id/eprint/13530

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