This paper examines whether owner-managers of small firms use their compensation strategically to change reported earnings. We identify an institutional setting, Denmark, in which the owner-manager has the discretion to shift compensation from salary to dividends and hence increase reported...

Compensation schemes have been blamed for encouraging excess risk-taking on the part of managers within the financial system and real economy. In general, compensation cannot decrease below the base salary, while gains from bonuses can be limitless. The potential link between compensation and...

The competitive target pay policy sets a target dollar number for total CEO compensation within a specified range of the amounts paid to a CEO’s peers chosen from similar sized firms in the same industry. If such a policy were widely adopted by compensation committees, we would observe a...

I study when a firm prefers to be transparent about pay using a simple multidimensional signaling model. Pay transparency within the firm means that a worker can learn about his own worker-firm match from another worker's pay. This can either encourage or discourage workers-which affects...

Economic disruptions generally create winners and losers. The compensation problem consists of designing a reform of the existing income tax system that offsets the welfare losses of the latter by redistributing the gains of the former. We derive a formula for the compensating tax reform and its...

Purpose - The objective of this study is to construct a theoretical framework concerning wage determination, grounded in principles and supplemented by conventional theories. It discusses the Islamic perspectives on minimum wage and examines contemporary challenges and intricacies in its...