This paper studies the role of optimal managerial compensation in reducing uncertainty about manager reporting objectives. It is shown that, paradoxically, firm owners allow managers with higher propensity to manipulate the short‐term stock price to push for higher powered and more...

We derive the optimal compensation contract in a principal-agent setting in which outcome is used to provide incentives for both effort and risky investments. To motivate investment, optimal compensation entails rewards for high as well as low outcomes, and it is increasing at the mean outcome...

The Sarbanes-Oxley Act of 2002 (SOX) imposed stringent requirements on corporate executives to hold them more accountable for their management decisions. This act has ramifications for executive pay as well. This study investigates the lessening effects of SOX on the association between...

This study examines the relationship between cross-listing and managerial compensation of Chinese firms that concurrently issued A- and B-shares or A- and H-shares during 2001 - 2010. The results show that executive compensation is a positive factor to motivate Chinese A-share firms to...