Bonus contracts are predominant in management remuneration. These contracts reward managers with variable payments in case of satisfactory performance. However, penalty contracts, which punish target failure with financial deductions, could be a competitive alternative. Nevertheless, they do not...

Finding an incentive system that optimally controls managerial effort and improves firm performance is an evergreen issue in both research and practice. Corporate governance recommendations and practical implementations aim at preventing short termism and promoting broad yet individual effort...

The limitation of executive compensation has been a matter of public and policy debate for at least 20 years. We examine a first-time regulatory action where the deductibility of the total value of executive compensation is limited and unavoidable. We find that, rather than reduce remuneration,...

This paper deals with the effects of tax rate uncertaity on risk-neutral and risk-averse investment behavior. We analyse effects of stochastic tax rates on both real and financial investment. It emerges that under risk neutrality as well as under risk aversion, increased tax rate uncertainty has...

This paper analyzes the impact of particular loss offset limitations on intrastate and cross-border investment decisions. Investment can be realized in the investor's domestic business, in a foreign branch or in a foreign subsidiary. The relative impact on the optimal real investment alternative...