Performance Measurement and Incentive Plans

Incentive Contracts and Performance Measurement

Balancing Incentive Compensation Plans

P ho to b y C O LI N A N D E R S O N /T he I m ag e B an k M any executives of medical technology companies count on incentive compensation plans to align their sales representatives’ goals with the goals of the company, but this oftentimes isn’t the result. Some very common types of incentive plans, when coupled with poorly balanced sales territories, can actually hinder a medtech company’s ab...

Operating performance around the adoption of director incentive plans *

Recently, numerous firms adopted incentive compensation plans for their outside directors. This study examines empirically the hypothesis that the adoption of such plans helps to improve the adopting firm’s operating performance by aligning the interests of directors and shareholders. The empirical tests do not reveal a significant link between the adoption of director incentive plans and opera...

Multi-task incentive contract and performance measurement with multidimensional types

This paper provides a new explanation for the dominance of the low-powered incentive contract over the high-powered incentive contract using a hybrid model of moral hazard and adverse selection. We first show that unobservable risk aversion or cost leads to lowpowered incentives. We then consider the case where both risk aversion and cost of the agent are unobservable to the principal. This mul...

When the Congress Says “ PIP Your KERP ” : Performance Incentive Plans , Key Employee Retention Plans and , Chapter 11 Bankruptcy Resolution

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) imposed stringent requirements on Key Employee Retention Plan (KERP) adoptions and implicitly favored Performance Incentive Plans (PIPs) in the amended Chapter 11. We use court documents to differentiate between retention versus performance incentive plans, and examine their impact on bankruptcy resolution before and after...