Linked Life Data

11463186

Source:http://linkedlifedata.com/resource/pubmed/id/11463186

Statements in which the resource exists as a subject.
PredicateObject
rdf:type
lifeskim:mentions
pubmed:issue
4
pubmed:dateCreated
2001-7-20
pubmed:abstractText
Given the considerable insight into corporate governance achieved through studies of executive compensation in proprietary firms it is surprising that executive contracting in nonprofit organizations remains largely unexplored. In this paper, we use the multitask principal agent model of Holmström and Milgrom [The Journal of Law, Economics and Organization 7 (1991) (Suppl.) 24] to argue that nonprofit hospitals represent an optimal response to information asymmetries between managers and boards. For a board with multidimensional objectives, the agency problem is getting top executives to distribute their efforts across all dimensions of the hospital's mission. The nonprofit form is preferred because the absence of high powered incentives such as share ownership reduces executives' incentives to place undue emphasis on improving financial performance at the expense of important but less observable tasks. Using newly available compensation data we test the model by comparing the conditional distributions of earnings for industrial and nonprofit hospital CEOs in Ontario. Our best estimates are that CEOs in publicly traded firms earn twice as much on average as those in similarly sized nonprofit hospitals but bear roughly eight times the income variance. Estimates of the associated degree of risk aversion are well within conventional bounds and are consistent with the trade-off between insurance and incentives predicted by the theory.
pubmed:language
eng
pubmed:journal
pubmed:citationSubset
H
pubmed:status
MEDLINE
pubmed:month
Jul
pubmed:issn
0167-6296
pubmed:author
pubmed:issnType
Print
pubmed:volume
20
pubmed:owner
NLM
pubmed:authorsComplete
Y
pubmed:pagination
509-25
pubmed:dateRevised
2004-11-17
pubmed:meshHeading
pubmed:year
2001
pubmed:articleTitle
Balancing incentives in the compensation contracts of nonprofit hospital CEOs.
pubmed:affiliation
Department of Health Administration, University of Toronto, Ont, Canada. colin@preyra.com
pubmed:publicationType
Journal Article