We study the evolution of pay in US bank holding companies since 1986 using a structural model of the banking firm. The model incorporates a strong complementarity between capital provided by shareholders and bankers' talent and its non-contractible effort. Bankers' pay is given as solution to...

We solve for a firm's optimal cash holding policy within a continuous time, contingent claims framework using dividends, short-term borrowing, and equity issues as controls assuming mean reversion of earnings. Optimal cash is non-monotone in business conditions and increasing in the level of...