| Record ID | marc_loc_2016/BooksAll.2016.part35.utf8:72954679:2484 |
| Source | Library of Congress |
| Download Link | /show-records/marc_loc_2016/BooksAll.2016.part35.utf8:72954679:2484?format=raw |
LEADER: 02484nam a22003017a 4500
001 2007616510
003 DLC
005 20070911093348.0
007 cr |||||||||||
008 070910s2007 mau sb 000 0 eng
010 $a 2007616510
040 $aDLC$cDLC
050 00 $aHB1
100 1 $aEdmans, Alex.
245 12 $aA calibratable model of optimal ceo incentives in market equilibrium$h[electronic resource] /$cAlex Edmans, Xavier Gabaix, Augustin Landier.
260 $aCambridge, MA :$bNational Bureau of Economic Research,$cc2007.
490 1 $aNBER working paper series ;$vworking paper 13372
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 9/10/2007.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"This paper presents a unified framework for understanding the determinants of both CEO incentives and total pay levels in competitive market equilibrium. It embeds a modified principal-agent problem into a talent assignment model to endogenize both elements of compensation. The model's closed form solutions yield testable predictions for how incentives should vary across firms under optimal contracting. In particular, our calibrations show that the negative relationship between the CEO's effective equity stake and firm size is quantitatively consistent with efficiency and need not reflect rent extraction. Our model and data both also imply that the dollar change in wealth for a percentage change in firm value, scaled by annual pay, is independent of firm size. This may render it an attractive incentive measure as it is comparable between firms and over time. The theory also predicts a positive relationship between pay volatility and firm volatility, and that risk and effort affect total pay along the cross-section but not in the aggregate. Finally, we demonstrate that incentive compensation is effective at solving large agency problems, such as selecting corporate strategy, but smaller issues such as perk consumption are best addressed through direct monitoring"--National Bureau of Economic Research web site.
700 1 $aGabaix, Xavier.
700 1 $aLandier, Augustin.
710 2 $aNational Bureau of Economic Research.
830 0 $aWorking paper series (National Bureau of Economic Research : Online) ;$vworking paper no. 13372.
856 40 $uhttp://papers.nber.org/papers/w13372