A large body of empirical work provides mixed support for the central prediction from agency theory that noisier performance measures receive less weight in incentive contracts. We develop a method to calculate price-based and non-price-based performance measure weights using CEO pay and holdings of stock, options, and performance-vested awards. Consistent with theory, we find that noisier performance measures receive less weight. We find that this negative relation strengthened following the adoption of ASC 718 (formerly SFAS 123R), which equalized the accounting treatment for options and other share-based awards. We further find that firms that increased non-price incentives for CEOs realized improvements in ROA and in Tobin’s Q. Our results suggest that misaligned incentives prior to ASC 718, and the under-weighting of non-price measures in particular, negatively affected firm performance.

中文翻译：

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非价格和价格表现归属条款和 CEO 激励

大量实证工作为代理理论的中心预测提供了不同的支持，即嘈杂的绩效指标在激励合同中的权重较小。我们开发了一种方法来计算基于价格和非基于价格的绩效衡量权重，使用 CEO 薪酬和持有的股票、期权和绩效授予奖励。与理论一致，我们发现噪声越大的性能指标获得的权重越小。我们发现，在采用 ASC 718（前身为 SFAS 123R）后，这种负相关关系得到加强，该标准使期权和其他基于股份的奖励的会计处理均等化。我们进一步发现，增加对 CEO 的非价格激励的公司实现了 ROA 和托宾 Q 的改善。我们的结果表明，在 ASC 718 之前，激励错位，