作者: Marco Celentani , Guillermo Caruana
DOI:
关键词: Investment (macroeconomics) 、 Compensation (psychology) 、 Realization (probability) 、 Profit (economics) 、 Microeconomics 、 Variance (accounting) 、 Investment decisions 、 Incentive 、 Reputation 、 Business
摘要: This paper considers a two-period model in which managers have superior information about their ability to forecast the realization of given investment projects. Firms compete for by offering short-run contracts. As future salaries depend on current play through its impact managerial reputation, managers' investment decisions are affected concern careers. We analyze interaction between these implicit incentives, created managers' career concerns, and explicit incentives made possible contingent compensation. show that concerns create perverse incentives that robust to introduction contracting. also find while compensation is monotonically increasing profit at date 2, it is not 1. Two numerical exercises relate the implications our results literature link between pay performance. In line with empirical findings, we that: i) pay-performance sensitivity highest final period managers' employment; ii) higher sensitivities associated lower variance profits.