Executive Compensation and Stock Options: AnInconvenient Truth

We reexamine the issue of executive compensation within a gen-eral equilibrium production context. Intertemporal optimality placesstrong restrictions on the form of a representative manager's compen-sation contract, restrictions that appear to be incompatible with thefact that the bulk of many high-pro¯le managers' compensation is inthe form of various options and option-like rewards. We thereforemeasure the extent to which a convex contract alone can induce themanager to adopt near-optimal investment and hiring decisions.[...]

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Year of publication:	2008-06-14
Authors:	Danthine, Jean-Pierre ; Donaldson, John B.
Institutions:	National Centre of Competence in ResearchFinancial Valuation and Risk Management
Subject:	Corporate Governance \| Vertrag \| Realer-Konjunkturzyklus-Theorie \| business cycle

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Extent:	311296 bytes 30 p. application/pdf
Series:	FINRISK Working Paper Series Working Paper ; No. 468 (2008)
Type of publication:	Book / Working Paper
Language:	English
Classification:	E32 - Business Fluctuations; Cycles ; E44 - Financial Markets and the Macroeconomy ; Strategic management ; Personnel management, Personnel planning and Personnel development ; Labour law and industrial relations ; Management of financial services: stock exchange and bank management science (including saving banks) ; Individual Working Papers, Preprints ; No country specification
Source:	USB Cologne (business full texts)

Persistent link: https://www.econbiz.de/10005868990