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to be incompatible with the fact that the bulk of many high-proffile managers' compensation is in the form of various …
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This paper investigates whether observed executive compensation contracts are designed to provide risk-taking incentives in addition to effort incentives. We develop a stylized principal-agent model that captures the interdependence between firm risk and managerial incentives. We calibrate the...
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Standard principal-agent theory predicts that large firms should not use employee stock options and other stock …
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