The increase in management compensation: Market or Power?

Co-edited by Margit Osterloh Frey, this book is published in German by Nomos, Baden Baden.

The worldwide increase in the salaries of managers is controversial. On the one hand, "optimal contracts" representatives argue that the increase in salaries is due to efficient markets. From this perspective, because the supply is scarce for managers who can deal with the challenges of increasing internationalization and deregulation of markets, prices will rise for such top talent.

On the other hand, representatives of the "power perspective" argue that the increase of salaries is explained by the failure of control boards and shareholders. This control failure is strengthened by internationalization and deregulation of markets, which increase the complexity of management. Management can exploit this situation. From this perspective, variable management compensation is not merely a means to solve such control problems, but part of the control problem itself.

In this book, renowned scientists, managers, board chairman, compensation consultants and shareholder activists from Switzerland and Germany discuss both perspectives. The articles provide insights into both the market and power perspective on executive pay, contrasting both perspectives and discuss optional control measures, for example in the context of existing knowledge on the regulation of athletes' salaries.

ISBN: 9783832966058