Abstract

AbstractThis paper finds that a CEO who is better monitored tends to have smaller wealth‐performance sensitivity (WPS). The results are consistent with the optimal contracting view and are robust to different measures of WPS. The findings suggest caution in drawing conclusions when researchers use WPS as an observable outcome of monitoring to test the effectiveness of monitoring. The association of monitoring and WPS is not necessarily positive, as assumed by prior corporate governance research.

Full Text
Published version (Free)

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 call