Do they affect efficiency and shareholder value?
Why does the CEO travel first class air accompanied by his spouse, gets booked at a super luxury hotel in which he can entertain anyone at company cost and, on return, gets picked up by his chauffeur driven limousine to get to his swanky office for a luncheon meeting in his private dining room? Does it help the company or is it just managerial excess that the shareholders pay for? A notable research on perquisites, a human resource management issue, was published at an unlikely organization, the National Bureau of Economic Research (NBER of USA) and by even more unlikely researchers the renowned Dr. Raghuram Rajan, now the Chief Economist of International Monetary Fund and Dr. Julie Wulf, an economist at Wharton School. This indicates the growing importance of managerial remuneration, incentives and perks in the context of industrial organization economics and corporate governance. In the working paper published in May 2004, they have discussed the results of data from 300 large compan
