The How Compensation Committees Shape Performance Share Awards to Executives: Insights from Agency and Managerial Power Theories

Résumé

The aim of the article is to study the allocation of performance shares to corporate officers and the role of the compensation committee (CC). Either the CC awards performance shares with the aim of aligning the interests of executives with those of shareholders or other stakeholders (agency theory). Or the CC allocates the performance shares desired by the manager himself by becoming an instrument at his service (theory of managerial power). Does the composition of the CC reveal its role? The answer could be positive if we also analyse the ownership structure.