High powered Incentives and Fraudulent Behavior: Stock based versus Stock Option based Compensation
AbstractThis paper examines the trade-off shareholders face between providing managers with incentives to exert beneficial effort and to engage in costly fraudulent activity. We provide a solution to the optimal compensation problem, given that shareholders can either grant (restricted) stock or stock options and given fixed average compensation costs.
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Bibliographic InfoPaper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number 542.
Date of creation: 2005
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Other versions of this item:
- Andergassen, Rainer, 2008. "High-powered incentives and fraudulent behavior: Stock-based versus stock option-based compensation," Economics Letters, Elsevier, vol. 101(2), pages 122-125, November.
- NEP-ALL-2006-09-03 (All new papers)
- NEP-CFN-2006-09-03 (Corporate Finance)
- NEP-FMK-2006-09-03 (Financial Markets)
- NEP-REG-2006-09-03 (Regulation)
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