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Preaching water but drinking wine? : relative performance evaluation in international banking
Ilić, Dragan; Pisarov, Sonja; Schmidt, Peter S. - 2016 - Revised version
Relative performance evaluation (RPE) is, at least on paper, enjoying widespread popularity in determining the level of executive compensation. Yet existing empirical evidence of RPE is decidedly mixed. Two principal explanations are held responsible for this discord. A constructional challenge...
Persistent link: https://www.econbiz.de/10011526823
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Dynamic contracting with long-term consequences : optimal CEO compensation and turnover
Vasama, Suvi - 2016
serially correlated over time. The model captures a learning-by-doing feature: higher effort by the manager increases the … quality of the match between the firm and the manager in the future. The optimal incentive scheme entails an inefficiently … turnover policy reaches efficiency; the manager is never retained if it is inefficient to do so. The manager’s compensation …
Persistent link: https://www.econbiz.de/10011550469
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Preaching water but drinking wine? : relative performance evaluation in international banking
Ilić, Dragan; Pisarov, Sonja; Schmidt, Peter S. - 2015
Relative performance evaluation (RPE) is, at least on paper, enjoying widespread popularity in determining the level of executive compensation. Yet existing empirical evidence of RPE is decidedly mixed. Two principal explanations are held responsible for this discord. A constructional challenge...
Persistent link: https://www.econbiz.de/10011384066
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Executive Compensation and Earnings Management under Moral Hazard
Sun, Bo - 2013
This paper analyzes executive compensation in a setting where managers may take a costly action to manipulate corporate performance, and whether managers do so is stochastic. We show that an increase in the possibility of manipulation actually calls for executive pay to be more responsive to...
Persistent link: https://www.econbiz.de/10013089812
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When Less is More : How Limits on Executive Pay Can Result in Greater Managerial Effort and the Adoption of Better Strategies
Cebon, Peter - 2013
We derive conditions under which state-imposed limits on executive compensation can enhance efficiency and benefit shareholders (but not executives). Having their hands tied in the future allows a board of directors to credibly enter into relational contracts with executives that are more...
Persistent link: https://www.econbiz.de/10013072185
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The Role of Executive Stock Options as Insurance for CEOs Against Hold-Up
Jones, Edward A.E. - 2013
Following Oyer (2004) and Rajgopal, Shevlin and Zamora (2006), we provide evidence that the level of stock option compensation results from outside opportunities in the managerial labor market for a sample of 3,214 CEO-year observations from S&P1500 companies between 1996 and 2010. We argue that...
Persistent link: https://www.econbiz.de/10013074659
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Executive Compensation and Earnings Management under Moral Hazard
Sun, Bo - 2009
The paper investigates the optimal structure of executive compensation with the possibility of financial data manipulation. We characterize the optimal compensation contract analytically, and establish necessary and sufficient conditions for earnings management to occur. The model shows that the...
Persistent link: https://www.econbiz.de/10013156138
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Effects of Compensation Contracts Disclosure on Executive Behavior
Oh, Joonghwa - 2020
effect of market competition and find that a manager works less in a more competitive environment when compensation contracts …
Persistent link: https://www.econbiz.de/10012837998
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Performance Peer Groups in CEO Compensation Contracts
Bakke, Tor-Erik - 2020
We take advantage of comprehensive panel data available as a result of the 2006 SEC disclosure rules on relative performance evaluation (RPE) to (i) better understand how firms choose performance peer groups used in CEO RPE contracts and (ii) to investigate the causal impact of mandatory...
Persistent link: https://www.econbiz.de/10012839697
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Executive Compensation : A Survey of Theory and Evidence
Edmans, Alex - 2017
This paper reviews the theoretical and empirical literature on executive compensation. We start by presenting data on the level of CEO and other top executive pay over time and across firms, the changing composition of pay; and the strength of executive incentives. We compare pay in U.S. public...
Persistent link: https://www.econbiz.de/10012953533