TY - JOUR
T1 - The relationship between financial incentives for company presidents and firm performance in Japan
AU - Kubo, Katsuyuki
AU - Saito, Takuji
N1 - Funding Information:
The authors would like to thank Hiroyuki Odagiri, Hideaki Miyajima, Shin’ichi Hirota, Noel Gaston, Andy Cosh, Peng Xu, Masaharu Hanazaki, Yishay Yafeh, an anonymous referee and the editor of the journal, Shin-ichi Fukuda, for their helpful comments and suggestions on an earlier version of this paper. Useful discussion by seminar participants at the universities of Hitotsubashi, Korea, Toyama and Waseda, the Research Institute of Capital Formation, the Development Bank of Japan and conference attendees at the DIW Berlin Workshop and the Japanese Economic Association Annual Meeting is also gratefully acknowledged. Katsuyuki Kubo acknowledges the financial support of a Grant-in-Aid for Scientific Research (15730113, 2003–04) from the Japanese Ministry of Education, Science, Sports and Culture.
PY - 2008
Y1 - 2008
N2 - 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%.
AB - 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%.
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U2 - 10.1111/j.1468-5876.2008.00420.x
DO - 10.1111/j.1468-5876.2008.00420.x
M3 - Article
AN - SCOPUS:56549083022
VL - 59
SP - 401
EP - 418
JO - Japanese Economic Review
JF - Japanese Economic Review
SN - 1352-4739
IS - 4
ER -