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We use an experiment with commercial bank loan officers to test how performance based compensation affects risk-assessment and lending. High-powered incentives lead to greater screening effort and more profitable lending decisions. This effect, however, is muted by deferred compensation and...
Persistent link: https://www.econbiz.de/10013075422
Persistent link: https://www.econbiz.de/10000168385
control markets (i.e., where interstate banking is permitted) require talented managers whose levels of compensation are … higher. We also find that the compensation-performance relationship is stronger than for managers in markets where interstate …
Persistent link: https://www.econbiz.de/10013125319
learning algorithm. The algorithm uncovers two distinct behavioral types: “leaders” and “managers”. Leaders focus on multi …-function, high-level meetings, while managers focus on one-to-one meetings with core functions. Firms with leader CEOs are on average …
Persistent link: https://www.econbiz.de/10012960702
We studied the relation of CEO pay and turnover to performance and characteristics of companies in a new data set that covers large commercial banks over the period 1982-87. For newly hired CEOs, the elasticity of pay with respect to assets is about one-third. As experience increases, the...
Persistent link: https://www.econbiz.de/10012767096
This paper examines executive turnover -- both for management and supervisory boards - - and its relation to firm performance in the largest companies in Germany in the 1980s. The management board turns over slowly -- at a rate of 10% per year -- implying that top executives in Germany have...
Persistent link: https://www.econbiz.de/10013218102
Managers' incentives may conflict with those of shareholders or creditors, particularly at leveraged, opaque banks …
Persistent link: https://www.econbiz.de/10013060693
We study the relationship between compensation and risk-taking among finance firms using a neglected insight from principal-agent contracting with hidden action and risk-averse agents. If the sensitivity of pay to stock price or slope does not vary with stock price volatility, then total...
Persistent link: https://www.econbiz.de/10013094549