This paper presents a unified theory of both the level and sensitivity of pay in competitive market equilibrium, by … CEO's low fractional ownership (the Jensen-Murphy incentives measure) and its negative relationship with firm size can be … empirical measure of incentives. Third, incentive pay is effective at solving agency problems with multiplicative impacts on …

-sharing selective incentives …

attaining the lower winning probability is the one choosing the rule giving higher incentives to the members …

This paper presents a unified framework for understanding the determinants of both CEO incentives and total pay levels … endogenize both elements of compensation. The model's closed form solutions yield testable predictions for how incentives should … and over time. The theory also predicts a positive relationship between pay volatility and firm volatility, and that risk …