Agency, firm growth, and managerial turnover

  title={Agency, firm growth, and managerial turnover},
  author={Ronald W. Anderson and Cec{\'i}lia Gassull Bustamante and St{\'e}phane Guibaud and Mihail Zervos},
We study the relation between firm growth and managerial incentive provision under moral hazard when a long-lived firm is operated by a sequence of managers. In our model, firms replace their managers not only upon poor performance to provide incentives, but also when outside managers are at a comparative advantage to lead the firm through a new growth phase. We show how the optimal contract can be implemented with a system of deferred compensation credit and bonuses, along with dismissal and… CONTINUE READING


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