CEO的薪酬、变动和企业战略 毕业论文外文翻译__精品.docxVIP

CEO Compensation, Change, andCorporate StrategyWe have created a cult of leadership that far exceeds anything that existeddecades ago. What we are getting now, very dangerously, is whatI call a dramatic style of managing; the great merger, the great downsizing, the massive brilliant new strategy. So we get all these massivemergers, fire, brimstone and drama, because you can’t say to the stock analysts, “we’re getting our logistics all straightened out, we’re going to bemuch more efficient at throughput to the customer.”They start to yawn. (Mintzberg, 2000)The problems resulting from separation of ownership and control have longbeen recognized inthe corporate governance and corporate finance literature (See, e.g., Berle and Means (1932), Jensen (1986), Hart (1995), Shleifer andVishny (1997)). Mintzberg’s analysis of the cult of leadership has three elements: (i) companies need to change and adapt; (ii) the CEO, rather than theshareholders, has power to decide on the direction of change (the strategy); and, (iii) the CEO may not select the optimal kind of change (for shareholdervalue) - it may be overly dramatic. In this paper, we study this idea from theperspective of the corporate governance literature, that is, using agency theory. Note that much of this literature has used an incomplete contracting approach (Hart,1995), and each of the three elements in Mintzberg’s argument suggestscontractual incompleteness. This is the approach we take here.Standard agency theory takes as given the existence of an incentive problem. The principal and agent agree on a (constrained) optimal contract, and then theagent goes to work on the problem. One feature of CEO compensation that isclearly different from this standard agency model is the fact that the contractis adjusted over time to reflect the evolution of the firm’s performance andits strategic direction. There is an annual pay-setting round at which optionsand incentive plans are renegotiated. Also, since he or she can infl