We reexamine the issue of executive compensation within a general equilibrium production context. Intertemporal optimality places strong restrictions on the form of a representative manager's compensation contract, restrictions that appear to be incompatible with the fact that the bulk of many...

We study the dynamic general equilibrium of an economy where risk averse shareholders delegate the management of the firm to risk averse managers. The optimal contract has two main components: an incentive component corresponding to a non-tradable equity position and a variable 'salary'...

Human capital is often considered as one of the most fundamental requirements for high organizational performance, whereas key driver for the achievement of higher levels of employees' productivity is considered the employment of a suitable performance appraisal system. Based on this...