work for. We reject, however, the efficient pay hypothesis as CEO pay and the demand for managers increases in Germany in … difficult times when the typical firm size shrinks. We find further that domestic and global competition for managers has …

findings suggest that, when managers engage in wasteful capital expenditures, welfare may decline if the cost of investment is …

corporate tax rates. We show that differences in productivities, differences in operational and tax risk and the correlations of …

model with strategic interaction between managers and outside shareholders, we hypothesize that, while an increase in the …

can limit the interference of the large shareholder and can restore manager’s incentive to exert effort to become informed …

. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their … the risk in his compensation. In particular, shareholders can monitor the manager’s portfolio stochastically, and since …Incentive compensation induces correlation between the portfolio of managers and the cash flow of the firms they manage …