Substance and Symbolism in CEOs' Long-Term Incentive Plans

摘要: Both authors contributed equally to the paper. The helpful comments of Jerry Davis, Paul Hirsch, Matt Kraatz, Joseph Moag, James Walsh, and seminar participants at MIT Stanford University are appreciated. We also thank Ann Yoo for assistance in data collection. This study theoretically empirically addresses possible separation substance symbolism CEO compensation contracts by examining political institutional determinants long-term incentive plan (LTIP) adoption use among 570 largest U.S. corporations over two decades. find that a substantial number firms likely adopt but not actually use-or only limitedly use-LTIPs, suggesting potential symbol contracts. Analyses suggest this decoupling LTIP is particularly prevalent with powerful CEOs poor prior performance. Further analyses show whereas early adopters more pursue alignment between shareholder interests substantively, later may legitimacy symbolically controlling agency costs. More generally, highlights how organizations can be understood terms both micro-political macro-institutional forces.'