BankPerformanceandExecutiveCompensation:AManagerialDiscretionPerspectiveAuthor(s):MichelL.MagnanandSylvieSt-OngeReviewedwork(s):Source:StrategicManagementJournal,Vol.18,No.7(Aug.,1997),pp.573-581Publishedby:JohnWiley&SonsStableURL:http://www.jstor.org/stable/3088151.Accessed:10/02/201221:23YouruseoftheJSTORarchiveindicatesyouracceptanceoftheTerms&ConditionsofUse,availableat.http://www.jstor.org/page/info/about/policies/terms.jspJSTORisanot-for-profitservicethathelpsscholars,researchers,andstudentsdiscover,use,andbuilduponawiderangeofcontentinatrusteddigitalarchive.Weuseinformationtechnologyandtoolstoincreaseproductivityandfacilitatenewformsofscholarship.FormoreinformationaboutJSTOR,pleasecontactsupport@jstor.org.JohnWiley&SonsiscollaboratingwithJSTORtodigitize,preserveandextendaccesstoStrategicManagementJournal.http://www.jstor.orgStrategicManagementJournal,Vol.18:7,573-581(1997)RESEARCHNOTESANDCOMMUNICATIONSBANKPERFORMANCEANDEXECUTIVECOMPENSATION:AMANAGERIALDISCRETIONPERSPECTIVEMICHELL.MAGNAN'*andSYLVIEST-ONGE2'DepartmentofAccountancy,HEC-Montreal,Montreal,Qu6bec,Canada2DepartmentofHumanResourcesManagement,HEC-Montreal,Montreal,Quebec,CanadaThisstudyinvestigateshowtherelationshipbetweenbankperformanceandexecutivecompen-sationisaffectedbythedegreeofanexecutive'smanagerialdiscretion.Managerialdiscretioniscapturedbytwoindustry-specificattributes:abank'sstrategicdomain,anditsregulatoryenvironment.Executivecompensationisfoundtobemorerelatedtobankperformanceinacontextofhighmanagerialdiscretionthaninacontextoflowmanagerialdiscretion.?1997byJohnWiley&Sons,Ltd.Inrecentyears,therelationshipbetweenfirmMANAGERIALDISCRETIONANDperformanceandexecutivecompensationhasEXECUTIVECOMPENSATIONincreasinglycomeunderthescrutinyofstock-holders,analystsandregulatoryagencies,suchasManagerialdiscretion,i.e.,thedecision-makingtheSecuritiesandExchangeCommission(SEC).latitudeheldbyexecutives,mayprovidesomeWhileperformance-basedexecutivecompensati