How managers and executives are evaluated and rewarded has become an increasingly contentious issue in recent years. The benefits and pitfalls of firms? compensation practices are routinely featured in the business press and have attracted considerable attention from governments, unions, as well...

We use survey data to estimate the effect of the 2008–2009 recession on three fundamental bonus plan choices. We find robust evidence that the recession (i) reduced incentive strength, (ii) increased the relative incentive weight on financial performance measures, and (iii) increased the...

We consider a principal-multi agent model that features a three-tier hierarchy, defined as a setting where the principal contracts with an agent-manager and delegates to the manager some authority to contract with other agents. A key highlight is that incentive compensation, performance...

Empirical evidence suggests that information leakage in capital markets is common. We present a trading model to study the incentives of an informed trader (e.g., a well informed insider) to voluntarily leak information about an asset's value to one or more independent traders. Our model shows...

We find that firms are less likely to report an internal control material weakness (as mandated by the Sarbanes-Oxley Act) in a given year if one of their audit committee members is concurrently on the board of a firm that disclosed a material weakness within the prior three years. We find a...

We use a linear contracting framework to study how the relation between performance measures used in an agent's incentive contract and the agent's private pre-decision information affects the value of delegating decision rights to the agent. The analysis relies on the idea that available...