We investigate the determinants of executive pay in a sample of Italian firms. To the best of our knowledge this is the first study on the compensation of Italian executives. We estimate that an increase of real profits per firm by 1 billion lire increases the pay of top executives by only 504...

We analyze the effects of optimism and overconfidence when the manager’s compensation package includes severance pay and the CEO has bargaining power. We find that optimism does not affect incentive pay but increases severance pay with a negative effect on profit. Overconfidence, on the...

We analyze the effects of optimism and overconfidence when the manager's compensation package includes severance pay. We find that optimism does not affect incentive pay but increases severance pay with a negative effect on profit. Overconfidence, on the contrary, reduces incentive pay as shown...