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

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 …

which the objectives of managers and entrepreneurs in choosing the risk composition of their firms' returns are not aligned … managers and entrepreneurs to unhedgeable firm-specific risk, induces them to change the stochastic properties of firm cash … flows. Since they can trade in markets for aggregate risk but not for firm-specific risk, managers and entrepreneurs produce …

We present a model of labor market equilibrium in which managers are risk-averse, managerial talent (‘alpha’) is scarce …, and firms seek alpha, that is, compete for this talent. When managers are not mobile across firms, firms provide efficient … long-term compensation, which allows for learning about managerial talent and insures low-quality managers. In contrast …

This paper presents a rational expectations model of optimal executive compensation in a setting where managers are in … a position to manipulate short-term stock prices, and managers' propensity to manipulate is uncertain. Stock …