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The Presence, Value, and Incentive Properties of Relative Performance Evaluation in Executive Compensation Contracts

Bettis, J. Carr - 2014

Using data that includes specific contractual details of Relative Performance Evaluation (RPE) contracts granted to executives for 1,833 firms for the period 1998 to 2012, we develop new methods to characterize RPE awards and measure their value and incentive properties. The frequency in the use...

Persistent link: https://www.econbiz.de/10013059189

The degradation of distorted performance measures

Sloof, Randolph; Praag, Mirjam van - 2008

Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts hinges on two characteristics: noise and distortion. These criteria, though, will only be useful in practice as long as the noise and distortion of a performance measure can be...

Persistent link: https://www.econbiz.de/10011376645

Management Team Incentive Dispersion and Firm Performance

Bushman, Robert M. - 2016

Recent theory suggests that firms incorporate synergistic interrelationships among executives into optimal incentive …

Persistent link: https://www.econbiz.de/10013008225

Do Earnings Targets and Managerial Incentives Affect Sticky Costs?

Kama, Itay - 2012

This study explores motivations underlying managers' resource adjustments. We focus on the impact of incentives to meet … earnings targets on resource adjustments and the ensuing cost structures. We find that when managers face incentives to avoid … managers' motivations, particularly agency-driven incentives underlying resource adjustment decisions …

Persistent link: https://www.econbiz.de/10013100549

How Powerful CFOs Camouflage and Exploit Equity-Based Incentive Compensation

Collins, Denton - 2017

process of a firm. Using managerial power theory (Bebchuk and Fried, 2003) and the theory of power and self-focus (Pitesa and …

Persistent link: https://www.econbiz.de/10012974079

Managerial Incentives, Options, and Cost-Structure Choices

Aboody, David - 2017

' cost structures, particularly the operating leverage (fixed-to-variable cost ratio). We find managers reduce operating … in option-based compensation following the issuance of FAS 123R. Managers facing a decrease in risk-taking incentives …, we present compelling evidence that managers adjust the cost structure of their firms in response to a reduction in risk …

Persistent link: https://www.econbiz.de/10012966524

Dual Ownership and Risk-taking Incentives in Managerial Compensation

Chen, Tao - 2020

This paper studies how managerial compensation is shaped by the risk preference of shareholders. Firms with a large ownership held by "dual holders'' -- institutional investors that simultaneously hold equity and bonds of the company -- choose a less risk-inducing compensation structure....

Persistent link: https://www.econbiz.de/10012848455

Performance-Based Vesting Compensation and Debt Contracting

King, Tao-Hsien Dolly - 2019

This paper examines whether the risk-taking incentives induced by performance-based vesting (p-v) compensation influence bank loan contracting and credit ratings. Consistent with our risk-shifting hypothesis, we find that the p-v based compensation, as measured by the proportion of grant date...

Persistent link: https://www.econbiz.de/10012865414

Effects of Compensation Contracts Disclosure on Executive Behavior

Oh, Joonghwa - 2020

are undisclosed, whereas when disclosed, managers could either work harder or less diligently. Our work provides some … increases both pay-performance sensitivity and managers' total compensation …

Persistent link: https://www.econbiz.de/10012837998

Incentives, Ethics and Bonus Structures

Daigle, Jamie - 2016

A variety of analogical literature is reviewed to ascertain oscillations in the collected works to determine a symphonic solution that is emancipatory of all incentives to conduct unethical manipulations of financial disclosures. The etymological question is how to structure an incentive plan...

Persistent link: https://www.econbiz.de/10012993411