The focus of the paper is on the remuneration of executives of large European banks. We describe the pay-for-performance sensitivity of the compensation and its disclosure as two dimensions of the board remuneration systems in the European countries.

This paper deals with a moral hazard problem resulting from a combined hidden action and hidden information situation.

This paper describes the pay-for-performance sensitivity of the compensation and its disclosure as two dimensions of the board remuneration systems in the European countries.

The literature provides evidence on the separate roles of injunctive and descriptive norms in explaining corporate financial reporting, ignoring that descriptive norms are likely endogenous and partly explained by injunctive norms. We jointly analyze the direct and indirect effects of religious...

Budgeting mechanisms help the CEO of a firm to restrict managerial discretion and therefore to mitigate the firm’s agency problems. By using flexible budgets, the CEO allows the managers to efficiently adapt their actions to changing economic conditions. Alternatively, rigid budgets result in...

Principal-Agent models consider vertical coordination problems within a firm, when there is a trade-off between efficient risk-sharing and efficient incentives to work. One reason of the agency problem is the activity set available to the agent and the principal's inability to costlessly observe...

We consider a single-principal/multi-agent model to investigate the principal's preferences over delegated contracting. The analysis extends the single-agent/multi-task LEN model in Feltham and Xie (1994) to a multi-agent/multi-task context. We consider full-commitment contracts, i.e., the...

We consider the incentive characteristics of optimal linear contracts based on relative performance evaluation (RPE) for managers under moral hazard in imperfectly competitive product markets. Each contract influences the quantity choices of all competing agents causing contract externalities...

The analysis in this paper extends the single-agent/multi-task LEN model in Feltham and Xie (1994) to a multi-agent/multi-task context. A key feature of the paper is that we consider centralized contracting with both full and limited commitment. The former refers to settings in which the...

This study uses principal agent analysis to investigate how the principal’s use of performance measures in the agent’s compensation contract are affected by (1) links between performance measures and (2) substitute and complementary characteristics of an agent’s efforts. We show that the...