The papers by Brickley, Bhagat and Lease ('The Impact of Long-Range Managerial Compensation Plans on Shareholder Wealth') and by Tehranian and Waegelein ('Market Reaction to Short-Term Executive Compensation Plan Adoption') examine stock price performance around the time firms adopt management incentive plans. Each paper finds positive stock price performance. In this overview, I integrate the ...

We present a sequence of two-period models of incentive-based compensation in order to understand how the properties of optimal compensation structures vary with changes in the model environment. Each model corresponds to a different occupation within a bank, such as credit line managers, loan originators, or traders. All models share a common trait: the effects of hidden actions are persistent...

I extend existing theories of social influence effects on executive compensation while at the same time showing the context dependence of these effects. Using original data on German firms and a longitudinal design, results of this study suggest that the operating of social influence mechanisms depends on demographic and social similarity between CEOs and board chairs. The findings reconcile pr...

We analyze several proposals to restrict CEO compensation and calibrate two models of executive compensation that describe how rms would react to dierent types of restrictions. We nd that many restrictions would have unintended consequences. Restrictions on total realized (ex-post) payouts lead to higher average compensation, higher rewards for mediocre performance, lower risk-taking incentives...

Using the kin altruism framework (Hamilton, 1964), this paper models descendant family firms. Kin altruism makes relatives soft monitors, leading to a “policing problem” within family firms. This policing problem results in both increased managerial diversion and increased monitoring expense at fixed compensation levels. When incentive constraints determine compensation, increasing kinship alwa...

This paper examines under what circumstances the market-based compensation scheme is effective in inducing managers’ incentives. We combine the optimal contract theory with the market microstructure literature and endogenize both the optimal compensation scheme and the stock market equilibrium. We analytically show that the incentive pay works better in a more efficient (or more informative) st...

This paper presents a new approach for estimating and improving voltage stability margin from phase and magnitude profile of bus voltages using sensitivity analysis of Voltage Stability Assessment Neural Network (VSANN). Bus voltage profile contains useful information about system stability margin including the effect of load-generation, line outage and reactive power compensation so, it is ad...

This research examined how framing a compensation contract potentially affects fraudulent behavior in organizations: specifically, the misrepresentation of performance and misappropriation of assets. We also explored how priming ethical concerns affects these behaviors. The relationship between fraudulent behavior and performance-contingent pay is important, especially in view of the dramatic i...