Showing 1 - 10 of 11
This paper reviews the theoretical and empirical literature on executive compensation. We start by presenting data on the level of CEO and other top executive pay over time and across firms, the changing composition of pay; and the strength of executive incentives. We compare pay in U.S. public...
Persistent link: https://www.econbiz.de/10012455086
result of powerful managers setting their own pay. Others interpret high pay as the result of optimal contracting in a …
Persistent link: https://www.econbiz.de/10012462072
This paper identifies a class of multiperiod agency problems in which the optimal contract is tractable (attainable in closed form). By modeling the noise before the action in each period, we force the contract to provide sufficient incentives state-by-state, rather than merely on average. This...
Persistent link: https://www.econbiz.de/10012463104
Contracts in a dynamic model must address a number of issues absent from static frameworks. Shocks to firm value may weaken the incentive effects of securities (e.g. cause options to fall out of the money), and the impact of some CEO actions may not be felt until far in the future. We derive the...
Persistent link: https://www.econbiz.de/10012463326
This paper presents a unified framework for understanding the determinants of both CEO incentives and total pay levels in competitive market equilibrium. It embeds a modified principal-agent problem into a talent assignment model to endogenize both elements of compensation. The model's closed...
Persistent link: https://www.econbiz.de/10012465278
motivation is market timing, providing an excellent framework for studying whether security issues reflect managers' ability to …
Persistent link: https://www.econbiz.de/10012465936
This paper develops a simple equilibrium model of CEO pay. CEOs have different talents and are matched to firms in a competitive assignment model. In market equilibrium, a CEO's pay changes one for one with aggregate firm size, while changing much less with the size of his own firm. The model...
Persistent link: https://www.econbiz.de/10012466300
This paper examines whether CEOs are fired after bad firm performance caused by factors beyond their control. Standard economic theory predicts that corporate boards filter out exogenous industry and market shocks to firm performance when deciding on CEO retention. Using a new hand-collected...
Persistent link: https://www.econbiz.de/10012466601
in top income inequality is driven by the rise of "superstar" entrepreneurs or managers …
Persistent link: https://www.econbiz.de/10012457305
This paper explores the impact of target CEOs' retirement preferences on the incidence, the pricing, and the outcomes of takeover bids. Mergers frequently force target CEOs to retire early, and CEOs' private merger costs are the forgone benefits of staying employed until the planned retirement...
Persistent link: https://www.econbiz.de/10012460994