managers. We question this view within its own analytical framework by studying, in a principal-agent model, the effects of … diversion overlooks a significant cost of such behavior. Many common modes of compensation can provide managers with incentives …

competitive industries, the negative relation between past returns and current leverage will be attenuated. Theory suggests that …

executive officers. However, firms are run by teams of managers, and a theory of the firm should also explain the distribution …

this risk. We use our theory to interpret some executive compensation data from the early 1970's. The results are generally …

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 …

and over time. The theory also predicts a positive relationship between pay volatility and firm volatility, and that risk …

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 …

We put forward a theory of the optimal capital structure of the firm based on Jensen's (1986) hypothesis that a firm …

We develop a model that shows how rent-seeking behavior on the part of division managers can subvert the workings of an … bribes to some division managers. And because headquarters is itself an agent of outside investors, the bribes may take the …