NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Are Perks Purely Managerial Excess?

Raghuram Rajan, Julie Wulf

NBER Working Paper No. 10494
Issued in May 2004, Revised in June 2020
NBER Program(s):Corporate Finance, Labor Studies

A widespread view is that executive perks exemplify agency problems -- they are a route through which managers misappropriate a firm’s surplus. Accordingly, firms with high free cash flow, operating in industries with limited investment prospects, should offer more perks, and firms subject to more external monitoring should offer fewer perks. The evidence for agency as an explanation of perks is, at best, mixed. Perks are, however, offered in situations in which they enhance managerial productivity. While we cannot rule out the occasional aberration, and while we have little to say on the overall level of perks, our findings suggest that treating perks purely as managerial excess is incorrect.

download in pdf format
   (276 K)

email paper

A non-technical summary of this paper is available in the November 2004 NBER Digest.  You can sign up to receive the NBER Digest by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w10494

Published: Rajan, Raghuram G. and Julie Wulf. "Are Perks Purely Managerial Excess?," Journal of Financial Economics, 2006, v79(1,Jan), 1-33. citation courtesy of

Users who downloaded this paper also downloaded* these:
Rajan w11728 Has Financial Development Made the World Riskier?
Rajan and Wulf w9633 The Flattening Firm: Evidence from Panel Data on the Changing Nature of Corporate Hierarchies
DellaVigna, Enikolopov, Mironova, Petrova, and Zhuravskaya w16989 Cross-border media and nationalism: Evidence from Serbian radio in Croatia
Oyer w11817 Salary or Benefits?
Bertrand and Mullainathan w9873 Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us