We examine the role of information-based stock trading in affecting the risk-incentive relation. By incorporating an endogenous informed trading into an optimal incentive contracting model, we analytically show that, apart from reducing incentives, a greater risk increases the level of information-based trading, which consequently enhances executive incentives and offsets the negative risk-incentive relation. We calibrate the model and find that the economic magnitude of this incentive-enhancement effect is significant. Our empirical test using real-world executive compensation data lends strong support to the model prediction. Our results suggest that principals (boards of directors) should consider underlying stock trading characteristics...
Compensation of executives by means of equity has long been seen as a means to tie executives' ...
Recent theoretical models derived from market microstructure have shown that liquid stock markets ca...
The study investigates how a publicly traded firm��s liquidation value and stock price are used in a...
textabstractThis paper investigates whether observed executive compensation contracts are designed t...
This paper analyzes the link between equity-based compensation and created incentives by (1) derivin...
Classic financial agency theory recommends compensation through stock options rather than shares to...
Research on executive compensation has been unable to explain the vast use of executive stock option...
We study the role of stock market characteristics on managerial compensation. A risk averse manager ...
In order to determine the structure of the optimal CEO contract, we create a principal agent model a...
This paper presents a model of optimal executive compensation in a setting where managers are in a p...
Classic financial agency theory recommends compensation through stock options rather than shares to ...
Classic financial agency theory recommends compensation through stock options rather than shares to ...
Incentives of executives and board of directors play an important role in corporate decisions. Princ...
Using a sample of mergers and acquisitions completed between 1992 and 2004, I examine the risk incen...
The study investigates how a publicly traded firm’s liquidation value and stock price are used in an...
Compensation of executives by means of equity has long been seen as a means to tie executives' ...
Recent theoretical models derived from market microstructure have shown that liquid stock markets ca...
The study investigates how a publicly traded firm��s liquidation value and stock price are used in a...
textabstractThis paper investigates whether observed executive compensation contracts are designed t...
This paper analyzes the link between equity-based compensation and created incentives by (1) derivin...
Classic financial agency theory recommends compensation through stock options rather than shares to...
Research on executive compensation has been unable to explain the vast use of executive stock option...
We study the role of stock market characteristics on managerial compensation. A risk averse manager ...
In order to determine the structure of the optimal CEO contract, we create a principal agent model a...
This paper presents a model of optimal executive compensation in a setting where managers are in a p...
Classic financial agency theory recommends compensation through stock options rather than shares to ...
Classic financial agency theory recommends compensation through stock options rather than shares to ...
Incentives of executives and board of directors play an important role in corporate decisions. Princ...
Using a sample of mergers and acquisitions completed between 1992 and 2004, I examine the risk incen...
The study investigates how a publicly traded firm’s liquidation value and stock price are used in an...
Compensation of executives by means of equity has long been seen as a means to tie executives' ...
Recent theoretical models derived from market microstructure have shown that liquid stock markets ca...
The study investigates how a publicly traded firm��s liquidation value and stock price are used in a...