Management accounting & control
Do compensation consultants assist in setting easy targets in performance-vested equity plans for CEOS?
Kuang, Y.F. | Qin, B. | Teijen, A.S. van
MCA, 2014
In this paper, the authors examine the role of a compensation consultant in executive compensation design. They find that firms hiring compensation consultants set more challenging performance targets than firms not using a consultant. The potential conflicts of interest between a client firm and its consultant (i.e., the consultant providing multiple services to the client) does not influence the target difficulty.
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