, generally implicit assumption that managers cannot undo their incentive packages, (ii) the standard modeling practice of … motives in managers' portfolio choices. …

Performance-based pay is an important instrument to align the interests of managers with the interests of shareholders …. However, recent evidence suggests that high-powered incentives also provide managers with incentives to manipulate the firm …'s reported earnings. The previous literature has focused primarily on Chief Executive Officers, but managers further down in the …

and control or in some situations even to fire and replace the executive managers. This means that their performance as … supervisors is totally different from the performance of the supervised executive managers and even the company at large. Moreover …