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Morck, Randall - 2009

Agency problems in economics virtually always entail self-interested agency exhibiting "insufficient" loyalty to principal. Social psychology also has a literature, mainly derived from work by Stanley Milgram, on issues of agency, but this emphasizes excessive loyalty -- people undergoing a...

Persistent link: https://www.econbiz.de/10012463599

Managerial Value Diversion and Shareholder Wealth

Bebchuk, Lucian Arye - 2000

managers. We question this view within its own analytical framework by studying, in a principal-agent model, the effects of … diversion overlooks a significant cost of such behavior. Many common modes of compensation can provide managers with incentives …

Persistent link: https://www.econbiz.de/10012471137

Do CEOs Set Their Own Pay? The Ones Without Principals Do

Bertrand, Marianne - 2000

We empirically examine two competing views of CEO pay. In the contracting view, pay is used to solve an agency problem: the compensation committee optimally chooses pay contracts which give the CEO incentives to maximize shareholder wealth. In the skimming view, pay is the result of an agency...

Persistent link: https://www.econbiz.de/10012471166

Does Product Market Competition Reduce Agency Costs?

Jagannathan, Ravi - 2000

The folk wisdom is that competition reduces agency costs. We provide indirect empirical support for this view. We argue that the temptation to retain cash and engage in less productive activities is more severe for firms in less competitive industries. Hence an unanticipated increase in...

Persistent link: https://www.econbiz.de/10012471296

Empire-Builders and Shirkers : Investment, Firm Performance, and Managerial Incentives

Aggarwal, Rajesh K. - 1999

shareholders and managers in which managers have private benefits or private costs of investment. Managers overinvest when they …, in isolation, is insufficient to identify whether managers have private benefits or private costs of investment. In order … to identify whether managers have private benefits or costs, we estimate the joint relationships between incentives and …

Persistent link: https://www.econbiz.de/10012471449

Performance Incentives Within Firms : The Effect of Managerial Responsibility

Aggarwal, Rajesh K. - 1999

executive officers. However, firms are run by teams of managers, and a theory of the firm should also explain the distribution …

Persistent link: https://www.econbiz.de/10012471450

Agency, Delayed Compensation, and the Structure of Executive Remuneration

Eaton, Jonathan - 1981

In this paper we examine the factors affecting the structure of executives' compensation packages. We focus particularly on the role of various types of delayed compensation as means of "bonding" executives to their firms. The basic problem is to design a compensation package that rewards...

Persistent link: https://www.econbiz.de/10012478336

Who’s Paying Attention? Measuring Common Ownership and Its Impact on Managerial Incentives

Gilje, Erik P. - 2019

We derive a measure that captures the extent to which overlapping ownership structures shift managers' incentives to …

Persistent link: https://www.econbiz.de/10012479596

Uncovering the Hidden Effort Problem

Ben-Rephael, Azi; Carlin, Bruce Ian; Da, Zhi; … - National Bureau of Economic Research - 2021

We use machine learning to analyze minute-by-minute Bloomberg online status data and study how the effort provision of top executives in public corporations affects firm value. While executives likely spend most of their time doing other activities, Bloomberg usage data allows us to characterize...

Persistent link: https://www.econbiz.de/10012482657

Tractability in Incentive Contracting

Edmans, Alex - 2009

This paper identifies a class of multiperiod agency problems in which the optimal contract is tractable (attainable in closed form). By modeling the noise before the action in each period, we force the contract to provide sufficient incentives state-by-state, rather than merely on average. This...

Persistent link: https://www.econbiz.de/10012463104