Discussion of “Are CEOs compensated for value destroying growth in earnings?”
September 2010
Article
volume 15, issue 3 pp 578-583.
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This discussion provides several explanations for the evidence presented in Balachandran and Mohanram (2010) that are consistent with efficient contracting. I also show that—contrary to the suggestion of the title—CEOs do not benefit from value destroying growth in earnings. Finally, I argue that there is no conclusive evidence that corporate investments destroy value.
Keywords
Classifications using
Journal of Economic Literature (JEL) Classification System
Automatically Extracted Terms
- investment
- growth
- earning
- earnings growth
- value
- stock
- compensation
- shareholder value
- return
- mohanram
- balachandran
- shareholder
- increase
- dittmann
- executive compensation
- executive
- profitability
- option
- journal
- future returns
