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The structure of CEO pay: pay-for-luck and stock-options

Chaigneau, Pierre; Sahuguet, Nicolas - C.E.P.R. Discussion Papers - 2012

We develop a stylized model of efficient contracting in which firms compete for CEOs. The optimal contracts are designed to retain and insure CEOs. The retention motive explains pay-for-luck in executive compensation, while the insurance feature explains asymmetric pay-for-luck. We show that the...

Persistent link: https://www.econbiz.de/10011084007

Equity Vesting and Managerial Myopia

Edmans, Alex; Fang, Vivian; Lewellen, Katharina A. - C.E.P.R. Discussion Papers - 2014

This paper links the CEO’s concerns for the current stock price to reductions in real investment. These concerns depend on the amount of equity he intends to sell in the short-term, but actual equity sales are an endogenous decision. We use the amount of stock and options scheduled to vest in...

Persistent link: https://www.econbiz.de/10011084396

Optimal Defaults for Corporate Law Evolution

Bebchuk, Lucian Arye; Hamdani, Assaf - C.E.P.R. Discussion Papers - 2002

should err in favour of the arrangement that is less favourable to managers. Such an approach, we show, would make it most …

Persistent link: https://www.econbiz.de/10005656367

Executive Compensation as an Agency Problem

Bebchuk, Lucian Arye; Fried, Jesse - C.E.P.R. Discussion Papers - 2003

instrument for addressing the agency problem between managers and shareholders but also as part of the agency problem itself … managers. As a result, managers wield substantial influence over their own pay arrangements, and they have an interest in … reducing the saliency of the amount of their pay and the extent to which that pay is de-coupled from managers’ performance. We …

Persistent link: https://www.econbiz.de/10005662270

Managerial Power and Rent Extraction in the Design of Executive Compensation

Bebchuk, Lucian Arye; Fried, Jesse; Walker, David I - C.E.P.R. Discussion Papers - 2002

constraints that act on these processes, leave managers with considerable power to shape their own pay arrangements. Examining the …

Persistent link: https://www.econbiz.de/10005114260

Bureaucracy as a Mechanism to Generate Information

Novaes, Walter; Zingales, Luigi - C.E.P.R. Discussion Papers - 2003

managerial turnover, and it establishes a link between bureaucracy, incentive schemes, and leverage in a cross-section of firms. …

Persistent link: https://www.econbiz.de/10005504447

A Product Market Theory of Worker Training

Gersbach, Hans; Schmutzler, Armin - C.E.P.R. Discussion Papers - 2003

We develop a product market theory that explains why firms invest in general training of their workers. We consider a model where firms first decide whether to invest in general human capital, then make wage offers for each other’s trained employees and finally engage in imperfect product...

Persistent link: https://www.econbiz.de/10005498011

Men at Work in a Land Down-under

Booth, Alison; Katic, Pamela - Research School of Economics, College of Business and … - 2008

We use new training data from waves 3-6 of the Household, Income and Labour Dynamics in Australia Survey to investigate the training and wages of full-time men. We explore the extent to which the data are consistent with the predictions of human capital theory or with recent alternative theories...

Persistent link: https://www.econbiz.de/10004971374

Do Funds Make More When They Trade More?

Pastor, Lubos; Stambaugh, Robert F.; Taylor, Lucian - C.E.P.R. Discussion Papers - 2014

We find that active mutual funds perform better after trading more. This time-series relation between a fund’s turnover … to scale, we find evidence of industry-level decreasing returns: The positive turnover-performance relation weakens when …

Persistent link: https://www.econbiz.de/10011083863

Getting Better or Feeling Better? How Equity Investors Respond to Investment Experience

Campbell, John Y; Ramadorai, Tarun; Ranish, Benjamin - C.E.P.R. Discussion Papers - 2014

investment performance. High trading profits increase turnover, while high returns to equity styles have a short-term negative … Indian stocks with an experienced and low-turnover investor base. …

Persistent link: https://www.econbiz.de/10011084250