El Departamento de Administración de la Facultad de Economía y Negocios de la Universidad de Chile, tienen el agrado de invitarle al Seminario Académico: Forging Agents of the State: How Political Institutions Impact CEO Compensation in State-Owned Enterprises.
Autores: Roxana Turturea (Stockholm School of Economics), Co-authors: Steve Sauerwald, Pursey Heugens.
Abstract:
Governments around the world are using executive compensation incentives to turn CEOs of hybrid state-owned enterprises (SOEs) into ‘agents of the state’. Conventional principal-principal (PP) agency theory does not explain how shareholders can be protected against governments allocating private means towards public ends, however, since governments cannot be kept in check with conventional corporate governance mechanisms. We extend the PP agency framework by detailing how political institutions serve as de facto corporate governance mechanisms to keep governments in check, impacting their motivation and ability to co-opt SOE CEOs through compensation-based incentives. Matched-samples evidence covering publicly listed firms from 20 countries corroborates our theoretical ideas. We find that political power and political factionalization aggravate PP agency problems by enlarging governments’ sway over hybrid SOEs, whereas political constraint and political polarization mitigate these problems.
