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Executive Compensation in America: Optimal Contracting or Extraction of Rents

Bebchuk, Lucian Arye; Fried, Jesse; Walker, David I - C.E.P.R. Discussion Papers - 2001

This Paper develops an account of the role and significance of rent extraction in executive compensation. Under the optimal contracting view of executive compensation, which has dominated academic research on the subject, pay arrangements are set by a board of directors that aims to maximize...

Persistent link: https://www.econbiz.de/10005123963

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

This Paper develops an account of the role and significance of managerial power and rent extraction in executive compensation. Under the optimal contracting approach to executive compensation, which has dominated academic research on the subject, pay arrangements are set by a board of directors...

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

Executive Compensation as an Agency Problem

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

This Paper provides an overview of the main theoretical elements and empirical underpinnings of a ‘managerial power’ approach to executive compensation. Under this approach, the design of executive compensation is viewed not only as an instrument for addressing the agency problem between...

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

The Internal Governance of Firms

Acharya, Viral V; Myers, Stewart C; Rajan, Raghuram G - C.E.P.R. Discussion Papers - 2009

We develop a model of internal governance where the self-serving actions of top management are limited by the potential reaction of subordinates. We find that internal governance can mitigate agency problems and ensure firms have substantial value, even without any external governance. Internal...

Persistent link: https://www.econbiz.de/10004980207

Shareholders and Stakeholders: Human Capital and Industry Equilibrium

Ippolito, Roberto; Miller, Marcus; Zhang, Lei - C.E.P.R. Discussion Papers - 1997

-specific skills. But the threat of poaching means that it is the individual ‘stakeholder’, not the firm, who must bear the cost. We …

Persistent link: https://www.econbiz.de/10005504300

Do Retail Incentives Work in Privatizations?

Keloharju, Matti; Knüpfer, Samuli; Torstila, Sami - C.E.P.R. Discussion Papers - 2004

20 countries around the world have used incentive packages, including bonus shares and discounts, to attract retail investors to participate in privatizations. Using a unique dataset, we estimate the total cost of incentive packages at approximately $27 billion. The expiration of bonus share...

Persistent link: https://www.econbiz.de/10005656346

Distressed Acquisitions

Meier, Jean-Marie A.; Servaes, Henri - C.E.P.R. Discussion Papers - 2014

Firms that buy distressed and bankrupt companies or some of these companies’ assets earn excess returns that are at least 1.6 percentage points higher than when they make regular acquisitions. These returns come at the expense of the target firm’s shareholders, while overall wealth gains are...

Persistent link: https://www.econbiz.de/10011083439

Performance Pay, CEO Dismissal, and the Dual Role of Takeovers

Burkart, Mike; Raff, Konrad - C.E.P.R. Discussion Papers - 2012

We propose that an active takeover market provides incentives by offering acquisition opportunities to successful … performance-based pay are non-monotonic in the intensity of the takeover threat. In firms with weak boards, turnover (performance …-based pay) increases (decreases) with the intensity of the takeover threat. When choosing its acquisition policy and the quality …

Persistent link: https://www.econbiz.de/10011083799

Third Party Monitoring and Golden Parachutes

Iossa, Elisabetta; Legros, Patrick - C.E.P.R. Discussion Papers - 2001

When today’s actions can affect tomorrow's value of an asset and when the principal does not have access to hard information, either about productive activity or monitoring activity, two incentive problems must be simultaneously solved: first, the ‘ex-ante’ moral hazard problem of inducing...

Persistent link: https://www.econbiz.de/10005504381

Control Benefits and CEO Discipline in Automatic Bankruptcy Auctions

Eckbo, B Espen; Thorburn, Karin S - C.E.P.R. Discussion Papers - 2002

We argue that the existence of CEO private control benefits complements managerial reputation in counteracting costly shareholder risk-shifting incentives during severe financial distress, when job-loss may be imminent. We examine this argument empirically using bankruptcy filings in Sweden,...

Persistent link: https://www.econbiz.de/10005123993

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