managerial talent and are matched to assets in a competitive assignment model. The marginal impact of a CEO's talent is assumed …

closed form). By modeling the noise before the action in each period, we force the contract to provide sufficient incentives …

This paper presents a market equilibrium model of CEO assignment, pay and incentives under risk aversion and … not affect pay. The strength of incentives depends only on the disutility of effort and is independent of risk and risk … aversion. If the CEO affects the volatility as well as mean of firm returns, incentives rise and are increasing in risk and …

competitive assignment model. In market equilibrium, a CEO%u2019s pay changes one for one with aggregate firm size, while changing … in CEO talent, which nonetheless justifies large pay differences. The data broadly support the model. The size of large …

in competitive market equilibrium. It embeds a modified principal-agent problem into a talent assignment model to …This paper presents a unified framework for understanding the determinants of both CEO incentives and total pay levels … endogenize both elements of compensation. The model's closed form solutions yield testable predictions for how incentives should …

), severance pay and debt compensation, and the insensitivity of incentives to risk … of incentives and their negative scaling with firm size, pay-for-luck, the widespread use of options (as opposed to stock …

force the contract to provide correct incentives state-by-state, rather than merely on average. This tightly constrains the … examples relating to CEO incentives. In particular, the model derives predictions for the optimal measure of incentives and …

embedding a moral hazard problem into a talent assignment model. By considering multiplicative specifications for the CEO … CEO's low fractional ownership (the Jensen-Murphy incentives measure) and its negative relationship with firm size can be … empirical measure of incentives. Third, incentive pay is effective at solving agency problems with multiplicative impacts on …