Please use this identifier to cite or link to this item: http://hdl.handle.net/10125/51922

Does It Pay to "Be Like Mike"? Aspirational Peer Firms and Relative Performance Evaluation

File SizeFormat 
HARC_2018_paper_51.pdf307.03 kBAdobe PDFView/Open

Item Summary

Title: Does It Pay to "Be Like Mike"? Aspirational Peer Firms and Relative Performance Evaluation
Authors: Ball, Ryan
Bonham, Jonathan
Hemmer, Thomas
Keywords: aspirational peer groups
relative performance evaluation
performance correlation
Issue Date: 18 Aug 2017
Abstract: We examine the manner and extent to which firms evaluate performance relative to aspirational peer firms. Guided by the predictions of an agency model, we find that CEO compensation increases in the correlation between own and aspirational peer firm performances. In addition, we define and test conditions where aggregate peer performance, which has been the primary focus of prior relative performance evaluation studies of competitive peers, is expected to have an association with CEO compensation. These conditions are supported by our empirical results. Finally, we document that our results are more pronounced when the firm-peer relationship is one-way and the peer firm is in a different industry and therefore is more aspirational.
URI/DOI: http://hdl.handle.net/10125/51922
Appears in Collections:05 Corporate Governance (CG)


Please contact sspace@hawaii.edu if you need this content in an alternative format.

Items in ScholarSpace are protected by copyright, with all rights reserved, unless otherwise indicated.