We examine the interaction between risk (uncertainty) and production efficiency in determining pay-performance sensitivity in optimal executive compensation. Particularly, we show that the risk-incentive trade-off is exacerbated (attenuated) as production efficiency increases when the efficiency level is greater (less) than the level of compensation risk. This result suggests that the optimalit...

he many burdens of government include those attributable to taxation, monetary policy, regulations, and restrictions on civil liberties. This paper is specific to the economic burden of taxation, without in any way minimizing the other types of burdens. The economic burden of taxation is a function of three conditions: the level of the average tax rate, the relation of the marginal tax rate to ...

Wages are determined by the fierce struggle between capitalist and worker. The capitalist inevitably wins. The capitalist can live longer without the worker than the worker can live without him. Combination among capitalists is habitual and effective, while combination among the workers is forbidden and has painful consequences for them. In addition to that, the landowner and the capitalist can...

We examine whether CEO power can explain the vast amount defined benefit pensions received by them. Analyzing a sample of UK firms from 2003 to 2006, we find that pensions constitutes of almost 15% of the average CEO compensation. Statistical analysis shows that the variables representing increased CEO power have a positive influence on pension pay. We also find that the presence of defined ben...

1 An employee injured at work in the UK is able to claim not only no-fault social security benefit from the state under the industrial injuries compensation scheme, but also damages from the employer if liability in tort can be established. Use of one system of compensation does not lead to exclusion from the other; there is no ‘employer privilege’ preventing an employee claiming from both work...

Over the past 20 years, there has been a dramatic increase in the share of executive compensation paid through stock options. We examine the extent to which tax policy has inuenced the composition of executive compensation, and discuss the implications of rising stock-based pay for tax policy. We begin by describing the tax rules for executive pay in detail and analyzing how changes in various...

We analyze the effect of committee formation on how corporate boards perform two main functions: setting CEO pay and overseeing the financial reporting process. The use of performance-based pay schemes induces the CEO to manipulate earnings, which leads to an increased need for board oversight. If the whole board is responsible for both functions, it is inclined to provide the CEO with a compen...