So Much Done, Yet More to Do: A Review of Executive Compensation Research Post-1998

The compensation of corporate executives continues to captivate various stakeholders, including management scholars, due to its implications for corporate governance and firm performance. Research on executive pay primarily addresses two key questions: the determinants of chief executive officer compensation and the effectiveness of these determinants in linking pay to performance. Contrasting theoretical perspectives have dominated this discourse. While agency theory advocates for performance-based pay tied to firm outcomes, alternative perspectives emphasize the salience of managerial power, sociopsychological processes, sociopolitical models, and institutional environments in shaping compensation practices. Scholars such as Barkema and Gomez-Mejia (1998) have highlighted the limitations of agency theory and urged the exploration of broader theoretical frameworks. This article traces the evolution of executive compensation research post-1998, examining whether scholars heeded calls to diversify their theoretical approaches to gain better understanding of the topic. By reviewing articles from the Academy of Management, this study assesses advancements in understanding executive pay and identifies potential missed opportunities, suggesting future research directions to enhance the field’s development.