May/June 2004

ALIGNING THE INTERESTS OF AGENTS AND OWNERS: AN EMPIRICAL EXAMINATION OF EXECUTIVE COMPENSATION
by Mark Anson and William McGrew and Bridgette Butler and Theodore White

A divergence of interests between a company's shareholders and executives is at the root of the "agency problem." No issue illuminates just how acute the problem is than executive compensation. Who's right and what's fair compensation. Managers with CalPERS, one of the vocal and visible institutional shareholders, have developed a model that will reveal if a certain executive compensation is warranted or not. Reprint # 9B04TC11

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About the Authors

Mark Anson
Mark Anson is Chief Investment Officer with CalPERS, the California Public Employees Retirement System, Sacramento, California.

William McGrew
William McGrew is Corporate Governance Investment Officer with CalPERS, the California Public Employees Retirement System, Sacramento, California.

Bridgette Butler
Bridgette Butler is Corporate Governance Investment Officer with CalPERS, the California Public Employees Retirement System, Sacramento, California.

Theodore White
R. Theodore White is Director of Corporate Governance with CalPERS, the California Public Employees Retirement System, Sacramento, California.

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