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Dur, Robert A. J.; Schmittdiel, Heiner - 2013

Inspired by a recent observation about an online retail company, this paper explains why a firm may find it optimal to offer an exit bonus to recent hires so as to induce self-selection. We study a double adverse selection problem, in which the principal can neither observe agents’ commitment...

Persistent link: https://www.econbiz.de/10010224783

How important are risk-taking incentives in executive compensation?

Dittmann, Ingolf; Yu, Ko-Chia - 2009

This paper investigates whether observed executive compensation contracts are designed to provide risk … observed compensation practice surprisingly well. In particular, it justifies large option holdings and high base salaries. Our … major objective in executive compensation practice. …

Persistent link: https://www.econbiz.de/10011378949

The degradation of distorted performance measures

Sloof, Randolph; Praag, Mirjam van - 2008

Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts …

Persistent link: https://www.econbiz.de/10011376645

Testing for distortions in performance measures : an application to residual income based measures like economic value added

Sloof, Randolph; Praag, Mirjam van - 2014

Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to …

Persistent link: https://www.econbiz.de/10010350010

Are CEOs incentivized to avoid corporate taxes? : empirical evidence on managerial bonus contracts

Schmittdiel, Heiner - 2014

explanation is that managers require to be compensated for the additional risk inherent in running an aggressive tax strategy. In … accordance with previous literature, we document a substantial heterogeneity in compensation practices across industries. It …

Persistent link: https://www.econbiz.de/10010346227

Positional wages, market wages and firm size

Brink, René van den; Ruys, Pieter H. M. - 2005

We model a firm in an institutional market setting, consisting of a production technology and its governance. The governance consists of a hierarchical firm structure, a cost efficiency parameter,and an internal pay system. The depth of the firm is determined by profit maximization under the...

Persistent link: https://www.econbiz.de/10011343293

The effects of performance measurement and compensation on motivation

Herpen, Marco van; Praag, Mirjam van; Cools, Cornelis - 2003

predict that the design and implementation of a performance measurement and compensation system affect the motivation of … compensation system and extrinsic motivation. Intrinsic motivation is not affected by the design of monetary compensation, but by … promotion opportunities. The compensation system also significantly affects work satisfaction and turnover intent. Our results …

Persistent link: https://www.econbiz.de/10011333892

Optimal incentive contracts when workers envy their boss

Dur, Robert A. J.; Glazer, Amihai - 2006

A worker's utility may increase with his income, but envy can make his utility decline with his employer's income. This article uses a principal-agent model to study profit-maximizing contracts when a worker envies his employer. Envy tightens the worker's participation constraint and so calls...

Persistent link: https://www.econbiz.de/10011335185

Wage structure and the incentive effect of promotions

Herpen, Marco van; Cools, Cornelis; Praag, Mirjam van - 2004

This paper studies wage structure characteristics and their incentive effects within one firm. Based on personnel records and an employee survey, we provide evidence that wages are attached to jobs and that promotions play a dominant role as a wage determinant. We furthermore show that a...

Persistent link: https://www.econbiz.de/10011337995

Social relations and relational incentives

Dur, Robert A. J.; Tichem, Jan - 2012

Persistent link: https://www.econbiz.de/10009722629

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