John, Kose; Mehran, Hamid; Qian, Yiming - In: Journal of Corporate Finance 16 (2010) 4, pp. 383-399
We hypothesize that CEO compensation is optimally designed to trade off two types of agency problems: the standard shareholder-management agency problem as well as the risk-shifting problem between shareholders and debtholders. Analyses in this setup produces two predictions: (1) the...