Sales-based CEO incentive and its effect across the supply chain

Author/Creator:

Choi, Jae Eun, author

Publication/Creation:

Ann Arbor : ProQuest Dissertations & Theses, 2022

Resource Type:

Book

More Details

Additional/Related Title Information

Full Title:

Sales-based CEO incentive and its effect across the supply chain / Jae Eun Choi

Related Names

Additional Author/Creators:

Sedatole, Karen, degree supervisor
Roberto C. Goizueta Business School, degree granting institution

Subjects/Genre

Genre:

Electronic dissertations
Academic theses

Description/Summary

Summary:

I examine the costs of using sales performance measures in CEO incentive contracts. A growing number of firms are evaluating and compensating their CEOs based on sales performance. However, since sales is a narrow metric of performance that does not incentivize expenditure control, these measures can motivate suboptimal operational decisions that affect not only the firm, but also its suppliers. In this study, I show that sales performance measures in CEO annual bonus contracts promote inefficient inventory management that generate the "bullwhip effect," whereby demand becomes more volatile as it travels up the supply chain. Instrumental variable tests using the firm's network connections to other firms suggest that the results are not driven by omitted factors. Collectively, my findings illuminate the spillover effect of CEO incentive contracts on economically linked operations.

Language:

English

Language Note:

English

Physical Type/Description:

1 electronic resource (58 pages)

General Note:

Source of abstract: Dissertations Abstracts International, Volume: 84-02, Section: B.
Advisors: Sedatole, Karen Committee members: Carter, Mary Ellen; Maturana, Gonzalo; Towry, Kristy; Dichev, Ilia.
Keywords: CEO compensation contracts; Bullwhip effect; Sales performance; Expenditure

Local Note:

ProQuest digital dissertation copies of Emory dissertations may be downloaded free of charge by Emory faculty, students, and staff unless the author has chosen to embargo the work.

Additional Identifiers

Catalog ID (MMSID):

9937655944202486

ISBN:

9798837520976