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I explore CEOs' incentives to select firm strategies and to acquire firm-specific skills when a few potential employers seeking to hire experienced CEOs create incentives for job-hopping.
Several features of managerial compensation, such as benchmarking of pay to larger and more prestigious companies, payments unrelated to past performance, unrestricted stock awards for highly paid CEOs, long-term incentives, and higher pay in companies granting long-term incentives, emerge in the optimal contract. I argue that the model can jointly explain the surge in U.S. CEO compensation and the differences in the structure and the level of managerial compensation across countries and across firms within a country.
Recent research shows that a high wage gap between managers and workers identifies better-performing firms, but the stock market does not seem to price...
We document a new channel through which a firm’s sustainability policies can contribute positively to its bottom line, by reducing labor costs and by...
Fiduciary duties in the vicinity of insolvency form a notoriously murky area where legal space warps. Courts openly acknowledge that it is difficult to...
We document that, over the last decade, the cross-sectional variation in CEO pay levels has declined precipitously, both at the economy level and within...