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Are CEOs paid extra for riskier pay packages?

Albuquerque, Ana; Albuquerque, Rui; Carter, Mary Ellen; … - 2020

Persistent link: https://www.econbiz.de/10012301018

Adding a stick to the carrot? : the interaction of bonuses and fines

Fehr, Ernst; Schmidt, Klaus M. - 2007

actually pay the announced bonus. This offers a new explanation for why explicit and implicit incentives are substitutes rather …

Persistent link: https://www.econbiz.de/10010365854

Dynamic managerial compensation : on the optimality of seniority-based schemes

Garrett, Daniel F.; Pavan, Alessandro - 2014

We study the optimal dynamics of incentives for a manager whose ability to generate cash .ows changes stochastically … with time and is his private information. We show that, in general, the power of incentives (or "pay for performance") may … power of incentives later in the relationship. Our results follow from a new variational approach that permits us to tackle …

Persistent link: https://www.econbiz.de/10010476876

Redistribution with performance pay

Doligalski, Pawel; Ndiaye, Abdoulaye; Werquin, Nicolas - 2020

Half of the jobs in the U.S. feature pay-for-performance. We study nonlinear income taxation in a model where such contracts arise in private labor markets that are constrained by moral hazard frictions. We derive novel formulas for the incidence of arbitrarily nonlinear reforms of a given tax...

Persistent link: https://www.econbiz.de/10012212848

The impact of incentive pay on corporate crime

Herold, Daniel - 2017

This paper presents a moral hazard model analyzing the agent's incentive to commit corporate crime. The principal can only observe profits which the agent can increase by committing crime or exerting effort. It is shown how different incentive contracts, i.e., thresholdlinear, capped bonus and...

Persistent link: https://www.econbiz.de/10011773464

You don't always get what you pay for

Schnedler, Wendelin - 2007

Consider a principal-agent relationship in which more effort by the agent raises the likelihood of success. Does rewarding success, i.e., paying a bonus, increase effort in this case? I find that bonuses have not only an incentive but also an income effect. Overall, bonuses paid for success may...