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Learning, termination, and payout policy in dynamic incentive contracts
DeMarzo, Peter M.; Sannikov, Yuliy - 2016
We study a principal-agent setting in which both sides learn about future profitability from output, and the project can be abandoned/terminated if profitability is too low. With learning, shirking by the agent both reduces output and lowers the principal's estimate of future profitability. The...
Persistent link: https://www.econbiz.de/10011864825
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Endogenous Selection and Moral Hazard in Executive Compensation Contracts
Armstrong, Chris - 2012
The two major paradigmsin the theoretical agency literature aremoral hazard (i.e., hidden action)and adverseselection (i.e., hiddeninformation). Prior research typically solves these problemsin isolation, as opposed to simultaneouslyincorporating both adverseselection and moral hazard features....
Persistent link: https://www.econbiz.de/10013116385
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Incentivizing team leaders : a firm-level experiment on subjective performance evaluation of leadership skills
Gall, Thomas; Hu, Xiaocheng; Vlassopoulos, Michael - 2023
In teamwork settings, providing effective leadership can be challenging for team leaders due to multitasking and the …, which can ultimately impede the productivity of the team. To address this problem, we conduct a field experiment at a … manufacturing firm, introducing a relative subjective performance evaluation of team leaders' leadership activities by their …
Persistent link: https://www.econbiz.de/10014278019
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Disentangling managerial incentives from a dynamic perspective : the role of stock grants
Hili, Amal; Laussel, Didier; Long, Ngo Van - 2016
We analyze the optimal contract between a risk-averse manager and the initial shareholders in a two-period model where the manager's investment effort, carried out in period 1, and her current effort, carried out in period 2, both impact the second-period profit, so that it may be difficult to...
Persistent link: https://www.econbiz.de/10011538964
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Separation of ownership and control : delegation as a commitment device
Boukouras, Aristotelis - 2011
This paper provides a theoretical model for explaining the separation of ownership and control in firms. An entrepreneur hires a worker, whose effort is necessary for running a project. The worker's effort determines the probability that the project will be completed on time, but the worker...
Persistent link: https://www.econbiz.de/10010348626
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Relative Performance Evaluation and Related Peer Groups in Executive Compensation Contracts
Gong, Guojin - 2010
This study examines the explicit use of relative performance evaluation (RPE) in executive compensation contracts and the selection of RPE peers. Using S&P 1500 firms' first proxy disclosures under the SEC's 2006 executive compensation disclosure rules, we find that about 25 percent of our...
Persistent link: https://www.econbiz.de/10013136412
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Relative Performance Evaluation and Related Peer Groups in Executive Compensation Contracts
Gong, Guojin - 2010
This study examines the explicit use of relative performance evaluation (RPE) in executive compensation contracts and the selection of RPE peers. Using S&P 1500 firms' first proxy disclosures under the SEC's 2006 executive compensation disclosure rules, we find that 25.44 percent of our sample...
Persistent link: https://www.econbiz.de/10013142627
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The effects of optimism bias in teams
Wang, Jian; Zhuang, Xintian; Yang, Jun; Sheng, Jiliang - In: Applied economics 46 (2014) 31/33, pp. 3980-3994
Persistent link: https://www.econbiz.de/10010419828
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CEO compensation
Frydman, Carola; Jenter, Dirk - 2010
This paper surveys the recent literature on CEO compensation. The rapid rise in CEO pay over the past 30 years has sparked an intense debate about the nature of the pay-setting process. Many view the high level of CEO compensation as the result of powerful managers setting their own pay. Others...
Persistent link: https://www.econbiz.de/10008797772
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Market competition and executive pay : increased competition affects the pay incentives firms provide to their managers and may also affect overall pay structures
Ferreira, Priscila - 2015
Deregulation and managerial compensation are two important topics on the political and academic agenda. The former has been a significant policy recommendation in light of the negative effects associated with overly restrictive regulation on markets and the economy. The latter relates to the...
Persistent link: https://www.econbiz.de/10011427661