The relationship between financial incentives for company presidents and firm performance in Japan

Katsuyuki Kubo, Takuji Saito

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

Kaplan (1994) concludes that the relationship between top pay and stock performance in Japan is similar to that in the USA. Using a new and comprehensive data set that includes presidents' stock and their stock option holdings, this study estimates the sensitivity of Japanese presidents' wealth to shareholder wealth in the period 1977-2000. Contrary to the commonly held belief that Japanese corporate governance is becoming more like that in the USA, the results show that pay-performance sensitivity actually decreased substantially after 1990. In 2000, Japanese presidents received $US22,100 when stock returns increased from -2.1% to 14.8%.

Original languageEnglish
Pages (from-to)401-418
Number of pages18
JournalJapanese Economic Review
Volume59
Issue number4
DOIs
Publication statusPublished - 2008
Externally publishedYes

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Firm performance
Financial incentives
Japan
Wealth
Corporate governance
Stock returns
Stock performance
Stock options
Shareholder wealth
Pay-performance sensitivity

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

The relationship between financial incentives for company presidents and firm performance in Japan. / Kubo, Katsuyuki; Saito, Takuji.

In: Japanese Economic Review, Vol. 59, No. 4, 2008, p. 401-418.

Research output: Contribution to journalArticle

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