Research focus

Research focus 1: Incentive systems and executive board compensation

We consider with the optimal design of incentive systems, particularly in the area of executive compensation. For example, we investigate how certain components of executive compensation influence decisions and how the optimal design of compensation systems depends on company characteristics. In addition, we analyse determinants of compensation and incentive systems in practice in order to understand whether and under what conditions compensation systems are designed efficiently. In connection with this, we enquire about optimal regulatory framework conditions, for example for transparency regarding board compensation . Methodologically, we draw on archival data and use various inferential statistical approaches (e.g. regression models, SEM, matching designs, analyses with instrument variables) as well as analytical models (e.g. principal-agent models).

Research focus 2: Effect and efficient design of internal control systems

In this focus area, we analyse how internal controlling systems - such as budget systems or transfer prices - should be designed in order to optimally align the interests of business units with corporate goals. In this way, we support companies in improving the design of their controlling systems. Factors that influence our decisions beyond the maximisation of our own monetary benefit play a special role. For example, what role do fairness, reciprocity or intrinsic motivation play in the optimal design of incentive and control systems? In particular, we use laboratory experiments to answer research questions in this area.
 

Research focus 3: Internal control and incentive systems to support ecological and social goals

Ecological or social goals such as reducing greenhouse gas emissions or improving employee safety are becoming increasingly important for investors. This trend raises important questions for management accounting research. How can management accounting help managers to identify the competitive advantages of a company in pursuing such goals? How do ESG targets interact with other targets in performance measurement systems? How susceptible to manipulation are ESG metrics? How can ESG metrics and related targets be disclosed transparently in compensation reports? We answer these questions in empirical studies by using laboratory experiments and analysing archival data.