We study the managers' compensation schemes adopted by publicly listed family firms by means of a theoretical model and an empirical analysis. Existing empirical literature finds puzzling evidence about the structure of family CEOs' pay, which apparently contradicts the fundamental tenets of...

We consider a two-stage principal-agent model with limited liability in which a CEO is employed as agent to gather information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that the CEO systematically recommends targets with low...