Executive Compensation Contract Adoption in the Electric Utility Industry
研究电力公用事业公司高管薪酬合同的采用是否与监管从成本加成转向效率挂钩、生产效率水平以及向非管制业务多元化有关，对关注高管激励与公司战略的学者有用。
This paper examines the hypothesis that changes in executive compensation contracts are an organizational response to shifts in the firm's external environment and/or corporate strategy. In particular, we consider whether the initial adoption of compensation contracts for senior executives in the electric utility industry is associated with a regulatory shift from a cost-plus revenue function to one explicitly linked to productive efficiency, the level of production efficiency, and diversification into unregulated business activities. We study the electric utility industry for several reasons. Electric utilities exhibit considerable variation in their executive compensation contracts, while their relatively homogenous production functions enhance the internal validity of our cross-sectional analysis of production efficiency. In addition, some electric utilities have experienced both substantial regulatory changes (i.e., institution of incentive regulation) and diversification into unregulated businesses that should, in theory, influence the compensation arrangements.