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Introducing managerial attention allocation in incentive contracts
Gil, Ricard; Mondria, Jordi - In: SERIEs : Journal of the Spanish Economic Association 2 (2011) 3, pp. 335-358
This paper introduces and studies the role of managerial attention allocation constraints in incentive contracts. We extend the traditional moral-hazard benchmark model with multi-tasking and linear incentive contracts by letting the principal choose the amount of monitoring allocated across...
Persistent link: https://www.econbiz.de/10009355542
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Industry Structure, Executive Pay, and Short-Termism
Thanassoulis, John E. - 2019
This study outlines a new theory linking industry structure to optimal employment contracts and executive short-termism. Firms hire their executives using optimal contracts derived within a competitive labour market. To motivate effort firms must use some variable remuneration. Such remuneration...
Persistent link: https://www.econbiz.de/10012905627
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Asymmetry of CEO Compensation and the Role of Relative and Macroeconomic Shocks in Risk Taking Incentives
Chiu, Hsin-Hui - 2015
If managers are risk-averse and compensation schemes are not directly linked to shareholder wealth, incentives to … then show how serial correlation in shocks, the relative variance of shocks and the ability of managers to influence the … asymmetric incentives in these two variables. Thus, if managers are risk-averse, their incentives to reduce the impact of …
Persistent link: https://www.econbiz.de/10013014268
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On the Valuation of Performance Fees and Their Impact on Asset Managers’ Incentives
Dai, Wei; Merton, Robert C.; Rizova, Savina - 2021
This paper provides a robust and practical framework for assessing performance fees. The fee valuation uses standard option pricing models and therefore does not require any expected return or alpha estimate. These features make our framework easy to use, robust, and widely applicable to a...
Persistent link: https://www.econbiz.de/10013225263
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Do Equity Mispricing and Management Compensation Incentives Drive Bank Mergers?
Doukas, John A. - 2014
-term underperformance, and (vii) reward their top managers of with large compensation increases subsequent to mergers …
Persistent link: https://www.econbiz.de/10013060077
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An Experimental Test of Career Concerns
Koch, Alexander K.; Morgenstern, Albrecht; Raab, Philippe - 2021
Holmstrom's (1982/99) career concerns model has become an important workhorse for the analysis of agency issues in many fields. The underlying signal jamming argument requires players to use information in a Bayesian way - which may or may not reasonably approximate real-life decision makers'...
Persistent link: https://www.econbiz.de/10013318886
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Relational Contracts and Managerial Delegation : Evidence from Foreign Entrepreneurs in Russia
Kulchina, Elena; Oxley, Joanne E. - 2019
leads foreign entrepreneurs to place little reliance on formal contracts in their dealings with local agent managers … industry growth creates a substantial ‘shadow of the future,’ where managers’ outside employment options are relatively limited …
Persistent link: https://www.econbiz.de/10014035117
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Multistage Financing : Milestone Bonuses or Deferred Compensation
Back, Kerry; Kakhbod, Ali; Xing, Hao - 2022
We develop a dynamic principal-agent model for financing a multistage project. The optimal contract displays the following unique features: (i) There is a pecking order between milestone bonuses and deferred compensation: when an intermediate stage succeeds, principal prefers to use deferred...
Persistent link: https://www.econbiz.de/10013406181
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Strategic delegation in experimental markets
Huck, Steffen; Müller, Wieland; Normann, Hans-Theo - 2000
contracts which determine their managers' salaries. One contract simply gives managers incentives to maximize firm profits … only rarely chosen in the experimental markets. This behavior is rational given that managers do not play according to the …
Persistent link: https://www.econbiz.de/10009583883
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Relative Performance Evaluation, Sabotage and Collusion
Bloomfield, Matthew J. - 2020
Relative performance evaluation (“RPE”) is a useful tool for shielding risk averse agents from systematic uncertainty. However, RPE can also destroy firm value by encouraging executives to implement excessively aggressive product market strategies to improve their relative standing through...
Persistent link: https://www.econbiz.de/10012843268