executive officers. However, firms are run by teams of managers, and a theory of the firm should also explain the distribution … shareholder wealth higher than the pay-performance incentives of executives with divisional responsibility. Executives with … dollar increase in shareholder wealth for the median firm in our sample. Our work sheds light on the alignment of …

result of powerful managers setting their own pay. Others interpret high pay as the result of optimal contracting in a …

responds strongly to innovations in shareholder wealth; measured as dollar changes in compensation, incentives have … strengthened over time, measured as percentage changes in wealth, they have not changed in any appreciable way …

Stock-based compensation is the standard solution to agency problems between shareholders and managers. In a dynamic … managers to work harder, it also induces them to hide any worsening of the firm's investment opportunities by following largely …-valued while managers hide the bad news to shareholders. We find that a firm-specific compensation package based on both stock and …

This paper examines managerial compensation in an environment where managers may take a hidden action that affects the … contract in this setting, and demonstrate that contracts contingent on reported earnings cannot provide managers with the …