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Is pay related to performance in The Netherlands? An analysis of Dutch executive compensation, 2002-2006

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Abstract

Summary: This paper analyzes the characteristics of Dutch pay arrangements. We show that (1) studying executive compensation outside the Anglo-American countries adds insights to the pay for performance literature, (2) pay for performance relations are different for various types of executives and for various compensation components, (3) attention to the methodological treatment of conditional stock (option) grants is important, and (4) researchers should go beyond stock market performance indicators to detect the performance relatedness of pay. All in all, a myriad of pay-performance relationships has been found for the Dutch case, when the above is accounted for.

Original languageEnglish
Pages (from-to)123-149
Number of pages27
JournalEconomist
Volume158
Issue number2
DOIs
Publication statusPublished - 1 Jun 2010
Externally publishedYes

Funding

Acknowledgments We thank seminar participants at the Academy of Management annual meeting (Anaheim, August 2008), the University of Groningen and the University of Antwerpen, and two anonymous referees for useful insights. Dirk Akkermans and Dennis Veltrop provided excellent assistance in data collection. Arjen van Witteloostuijn gratefully acknowledges the financial support through the Odysseus program of the Flemish Science Foundation (FWO).

Keywords

  • Executive compensation
  • Pay for performance
  • The Netherlands

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