Essays in banking and corporate finance

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ID Serval
serval:BIB_56E115F4A054
Type
Thèse: thèse de doctorat.
Collection
Publications
Titre
Essays in banking and corporate finance
Auteur(s)
Niu J.
Directeur(s)
Morellec E.
Détails de l'institution
Université de Lausanne, Faculté des hautes études commerciales
Statut éditorial
Acceptée
Date de publication
07/2007
Langue
anglais
Nombre de pages
93
Résumé
Abstract
This paper presents a model of executive compensation in which the executive is risk-averse and has specific knowledge -knowledge about the optimal actions to take that is costly to transfer to the principal. The model generates predictions that are consistent with the available evidence and provides a rationale for a number of unresolved puzzles in executive compensation. Notably, we find that relative performance evaluation is optimal only if the quality of specific knowledge is low. We also show (1) why some common risk components are not filtered out of executives' pay, (2) why performance is more likely to be evaluated relative to aggregate market movements than relative to industry movements, and (3) why executives with higher perceived abilities are given stronger incentives. Finally, we demonstrate that the relation between risk and incentives may be positive or negative, depending on the quality of the executive's specific knowledge.
Mots-clé
Specific knowledge, Compensation
Création de la notice
15/07/2010 13:35
Dernière modification de la notice
20/08/2019 15:11
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