negative effect on profit. Overconfidence, on the contrary, reduces incentive pay as shown by the previous literature, while …We analyze the effects of optimism and overconfidence when the manager's compensation package includes severance pay … its effect on severance pay depends on the intensity of the bias. High values of overconfidence yield an inefficient level …

second-period profit, so that it may be difficult to disentangle the incentives for these two types of effort. The contract … stipulates (a) the profit-contingent cash remuneration for each period, (b) the number of shares that will be granted to the …

compensation to managers in low-tax jurisdictions, if payroll enters the FA formula. Managers in high-tax jurisdictions face the … opposite effect. Further, the composition of the compensation packages changes. Overall, net profit increases, because FA … offers potential for profit shifting. …

. Agency theory’s insistence on linking the compensation of managers and directors as closely as possible to firm performance …

that have different degrees of overconfidence. The channel through which the matching occurs is the share of bonus payments … offered by banks in their profit-maximizing contracts. This yields a sequence of hypotheses: banks with more government … to an assortative matching between overconfident managers and banks with a larger bailout probability. We then test the …