Performance-based pay is an important instrument to align the interests of managers with the interests of shareholders …. However, recent evidence suggests that high-powered incentives also provide managers with incentives to manipulate the firm …'s reported earnings. The previous literature has focused primarily on Chief Executive Officers, but managers further down in the …

.e., volatility of sales volume), which supports the prediction of agency theory. Importantly, findings indicate that branch managers …Agency theory argues that pay-performance sensitivity should be negatively associated with risk. Yet, empirical studies … who adjust salespersons' pay-performance sensitivity consistent with the suggestion of agency theory perform better than …