In this study, insider trading activity is used as part of a managerial compensation structure. The wage structure changes with the tenure duration of the insider. Managers with shorter tenure rely more on insider profits as part of their compensation. On the other hand, managers with longer...

This paper uses the insider trading direction as a signal to design an optimal wage contract, where the principal-agent problem due to moral hazard is resolved. Insider trading provides the corporation important information about the action of the manager. It is a tough challenge for the owners...

Our evidence indicates that insiders' trades provide significant new information to market participants and they are incorporated more fully in stock prices as compared to non-insiders' trades. We find that market professionals do not front-run insiders' trades. Both insiders' purchases and...