Inderst, Roman; Mueller, Holger M - C.E.P.R. Discussion Papers - 2005
Future wage payments drive a wedge between total firm output and the output share received by the firm’s owners, thus … this perspective is a broad-based option plan. Broad-based option pay minimizes the firm’s expected future wage payments in … precisely those states of nature where, e.g., a high fixed wage would lead the firm’s owners to inefficiently exit. …