Abstract
The research on the relationship between executive compensation and firm performance is extensive but has produced inconsistent results and, typically, weak explanatory power. One cause of these results is use of an incomplete theoretical framework that ignores some variables that are related to these two concepts. We explore the missing links between them. The paper contributes to scholarly and practical understanding of this important issue in the literature by extending and combining agency theory, upper echelons theory, and motivation theory perspectives. The paper develops a model that describes and explains the interactive relationship between executive managerial ability, executive compensation, strategic choices and firm performance. It puts forward the argument that executive managerial ability is related to strategic choices, and executive compensation moderates this relationship. Additionally, the paper suggests that strategic choice is an important variable that has not been explicitly accounted for in the relationship between compensation and firm performance.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Business and Globalisation
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
