Working Paper 06/2009 available

The working paper 06/2009 studies the impact of external reference values on managerial compensation contracts. The authors, Gregoric, Polanec & Slapničar, consider the effect of adoption of non-binding pay norms on actual remuneration behavior using a unique country example. They find that introduction of pay norms changed the reference values for CEOs and led to adjustment of executive compensation towards new equilibrium. These pay norms affected pay in firms with actual compensation below and above reference values. Further they find that reference values changed compensation in all types of firms, although executive compensation increased more in firms with more dispersed ownership and control. These results confirm the importance of reference values in bargaining process between owners and managers.

Aleksandra Gregoric, Ph.D., Assistant Professor, holds a Masters degree in Economics and Banking from University of Siena (Italy) and a Ph.D. in Corporate Governance from the Faculty of Economics in Ljubljana (Slovenia). Her research mostly focuses on the issues of corporate governance, particularly on the questions related to ownership, executive remuneration and board structures. Her research is published in books and international journals, among which the Economics of Transition Journal (forthcoming), the European Journal of Comparative Economics and in the Annals of Public and Cooperative Economics. Aleksandra is an academic member of the European Corporate Governance Institute (ECGI), of the European Centre for Comparative Commercial and Company Law and of the International Organization for the Economics of Participation.