High-powered incentives and fraudulent behavior: Stock-based versus stock option-based compensation

This paper examines the trade-off shareholders face between providing managers with incentives to exert beneficial effort and to engage in costly fraudulent activity. We provide a solution to the optimal compensation problem, given that shareholders can either grant (restricted) stock or stock options and given fixed average compensation costs.

MoreLess

Year of publication:	2008
Authors:	Andergassen, Rainer
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 101.2008, 2, p. 122-125
Publisher:	Elsevier
Keywords:	Executive compensation Executive stock options Restricted stock Fraud Incentives

More details

Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005307585