Are perks purely managerial excess?
By: Raghuram Rajan, Julie Wulf.
Contributors: Wulf, Julie, 1956-; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10494; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10494.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Executives -- Salaries, etc.
Description: "Why do some firms tend to offer executives a variety of perks while others offer none at all? A widespread view in the corporate finance literature is that executive perks are a form of agency or private benefit and a way for managers to misappropriate some of the surplus the firm generates.  According to this view, firms with plenty of free cash flow that operate in industries with limited investment prospects should typically offer perks.  The theory also suggests that firms that are subject to more external monitoring should have fewer perks.  Overall, the evidence for the private benefits explanation is, at best, mixed.  We do, however, find evidence that perks are offered most in situations where they are likely to enhance managerial productivity.  This suggests that a view of perks that sees them purely as managerial excess is incorrect"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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