%0 Report
        %A Dyballa, Katharina
%A Kraft, Kornelius
        %T How Do Labor Representatives Affect Incentive Orientation of Executive Compensation?
        %D 2016
        %8 2016 Aug
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 10153
        %U https://www.iza.org/publications/dp10153
        %X Contrary to previous literature we hypothesize that labor's interest may well – like that of shareholders – aim at securing the long-run survival of the firm. Consequently, employee representatives on the supervisory board could well have an interest in increasing incentive-based compensation to avoid management's excessive risk taking and short-run oriented decisions. We compile unique panel data on executive compensation over the periods 2006 to 2011 for 405 listed companies and use a Hausman-Taylor approach to estimate the effect of codetermination on the compensation design. Finally, codetermination has a significantly positive effect on performance-based components of compensation, which supports our hypothesis.
        %K corporate finance
%K principal-agent theory
%K board representation
%K executive compensation
%K Hausman-Taylor