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Incentive Compensation when Executives can Hedge the Market: Evidence of Relative Performance Evaluation in the Cross Section
Little evidence exists that firms index executive compensation to remove the influence of marketwide factors. We argue that executives can, in principle, replicate such indexation in their privateExpand
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Incentives for Helping on the Job: Theory and Evidence
Recent advances in incentive theory stress the multidimensional nature of agent effort and specifically cases where workers affect one anothers' performance through “helping” efforts. This articleExpand
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Asymmetric benchmarking in compensation: Executives are rewarded for good luck but not penalized for bad
Abstract Principal-agent theory suggests that a manager should be paid relative to a benchmark that removes the effect of market or sector performance on the firm's own performance. Recently, it hasExpand
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Capital Structure and Corporate Control: The Effect of Antitakeover Statutes on Firm Leverage
We find that firms protected by "second generation" state antitakeover laws substantially reduce their use of debt, and that unprotected firms do the reverse. This result supports recent models inExpand
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Why reputation favors joint ventures over vertical and horizontal integration A simple model
Abstract This paper investigates the effect of reputation in a model where two parties make noncontractable contributions to an economic undertaking. It is shown that the optimal allocation ofExpand
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Marketable Incentive Contracts and Capital Structure Relevance
This article investigates the claim that debt finance can increase firm value by curtailing managers' access to 'free cash flow.' The author first shows that incentive contracts that tie theExpand
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EVA versus Earnings: Does it Matter which is More Highly Correlated with Stock Returns?
Dissatisfaction with traditional accounting-based performance measures has spawned a number of alternatives, of which Economic Value Added (EVA) is clearly the most prominent. How can we tell whichExpand
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Asymmetric Benchmarking in Compensation: Executives are Paid for (Good) Luck But Not Punished for Bad
Principal-agent theory suggests that a manager should be paid relative to a benchmark that captures the effect of market or sector performance on the firm's own performance. Recently, it has beenExpand
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What Can Market Microstructure Contribute to Explaining Executive Incentive Pay ? : Liquidity and the Use of Stock-Based Compensation Version June 17 , 2002
Recent theoretical models derived from market microstructure have shown that liquid stock markets can improve the alignment of managers’ and shareholders’ interests, contrary to the traditional viewExpand
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The economics of corporate governance: Beyond the Marshallian firm☆
It is now customary to view the corporation as nexus of explicit and implicit contracts. Governance determines how the firm's top decision makers (executives) actually administer such contracts. WeExpand
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