Efing, Matthias; Hau, Harald; Kampkötter, Patrick; … - 2019
We argue that risk sharing motivates the bank-wide structure of bonus pay. In the presence of financial frictions that … sharing whereby bonus pay partially absorbs earnings shocks. Using payroll data for 1:26 million employee-years in all … functional divisions of Austrian, German, and Swiss banks, we uncover several empirical patterns in bonus pay that are difficult …