This thesis investigates two issues. The first issue concerns the relation between executive effort, as measured by changes in a firm's market value of equity, and future wage revisions when the executive moves to a new firm of employment. If, as Fama (1980) contends, participants in the managerial labor market formulate compensation on the basis of prior performance, there is little need to design compensation contracts that are sensitive to firm performance. The second issue involves performance persistence in the management of real assets. Prior studies provide weak evidence that performance is persistent in the management of financial assets. Similar evidence is not available for the management of real assets. / The analyses provide two distinct conclusions. First, compensation revisions across firms bear a positive and significant relation to prior changes in shareholder wealth. The magnitude of this relation, however, does not preclude the continued existence of agency problems. Second, executives appear unable to repeat superior performance across firms. Surprisingly, there is evidence of declining performance at executives' second firm of employment. This result is robust to different performance relatives and time horizons. / Thus, the evidence presented suggests that prior performance is not the decisive determinant of the wage revision received by an executive. This seems warranted given that prior performance appears to offer no predictive power for future performance. / Source: Dissertation Abstracts International, Volume: 57-02, Section: A, page: 0793. / Major Professor: James S. Ang. / Thesis (Ph.D.)--The Florida State University, 1996.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_77654 |
| Contributors | Best, Roger Julian., Florida State University |
| Source Sets | Florida State University |
| Language | English |
| Detected Language | English |
| Type | Text |
| Format | 92 p. |
| Rights | On campus use only. |
| Relation | Dissertation Abstracts International |
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