Agency Theory Revisited: CEO Return and Shareholder Interest Alignment

Anthony Nyberg, Ingrid Fulmer, Barry Gerhart, Mason Carpenter

Research output: Contribution to journalArticlepeer-review


Agency theory suggests that managerial mischief may occur when the interests of owners and managers diverge and that a solution to this agency problem is alignment of owner and agent interests through agent compensation and equity ownership. We develop the theoretical concept of CEO return and measure and estimate financial alignment as the relationship between CEO and shareholder returns. Our results, based on this new conceptualization and corresponding measurement, suggest stronger alignment than reported in previous work. The magnitude of this alignment is associated with subsequent firm performance, but in ways not clearly articulated or tested in prior research.

Original languageEnglish (US)
Pages (from-to)1029-1049
Number of pages21
JournalAcademy of Management Journal
Issue number5
StatePublished - Oct 1 2010
Externally publishedYes

ASJC Scopus subject areas

  • Business and International Management
  • General Business, Management and Accounting
  • Strategy and Management
  • Management of Technology and Innovation


Dive into the research topics of 'Agency Theory Revisited: CEO Return and Shareholder Interest Alignment'. Together they form a unique fingerprint.

Cite this