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Remuneration systems
Introduction: This page is the main page for information about
incentive based compensation systems / remuneration systems.
These systems
are of major importance in corporate governance because their design affects the
incentives of managers and thereby
the efficiency of the firm.
They are defined as
the
systems that regulate the pecuniary compensation of managers’ and directors’
for their ‘sale’ of management services. Note that this definition excludes
managerial income stemming from equity ownership. Classic references on
incentive based compensation systems are Hart and Holmström [1987, part 1],
Murphy Kevin J. [1999].
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