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Dynamic Incentive Accounts

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  • Yuliy Sannikov

    (Princeton)

  • Xavier Gabaix

    (NYU)

  • Tomasz Sadzik

    (NYU)

  • Alex Edmans

    (Wharton)

Abstract

remainder in cash. The account features state-dependent rebalancing and time-dependent vesting. It is constantly rebalanced so that the equity fraction remains above a certain threshold; this threshold sensitivity is typically increasing over time even in the absence of career concerns. The account vests gradually both during the CEO's employment and after he quits, to deter short-termist actions before retirement.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 1207.

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Date of creation: 2010
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Handle: RePEc:red:sed010:1207

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References

References listed on IDEAS
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Better incentives for CEOs, and mutual fund managers, too
    by Economic Logician in Economic Logic on 2009-10-14 14:11:00
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Cited by:
  1. Giannetti, Mariassunta, 2011. "Serial CEO incentives and the structure of managerial contracts," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 20(4), pages 633-662, October.
  2. Edmans, Alex & Gabaix, Xavier, 2009. "Tractability in Incentive Contracting," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7578, C.E.P.R. Discussion Papers.
  3. George-Marios Angeletos & Alessandro Pavan, 2006. "Socially Optimal Coordination: Characterization and Policy Implications," NBER Working Papers 12778, National Bureau of Economic Research, Inc.
  4. repec:dgr:uvatin:2009076 is not listed on IDEAS
  5. Alex Gershkov & Motty Perry, 2012. "Dynamic Contracts with Moral Hazard and Adverse Selection," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 268-306.
  6. Marco LiCalzi & Alessandro Pavan, 2003. "Tilting the Supply Schedule to Enhance Competition in Uniform-Price Auctions," Working Papers 2003.22, Fondazione Eni Enrico Mattei.
  7. Pierre Chaigneau, 2010. "The Optimal Timing of Executive Compensation," FMG Discussion Papers, Financial Markets Group dp660, Financial Markets Group.
  8. Kim, E. Han & Lu, Yao, 2011. "CEO ownership, external governance, and risk-taking," Journal of Financial Economics, Elsevier, Elsevier, vol. 102(2), pages 272-292.
  9. Jacek Rothert, 2009. "Monitoring, Moral Hazard and Turnover," Department of Economics Working Papers, The University of Texas at Austin, Department of Economics 130124, The University of Texas at Austin, Department of Economics, revised Sep 2012.
  10. He, Zhiguo, 2011. "A model of dynamic compensation and capital structure," Journal of Financial Economics, Elsevier, Elsevier, vol. 100(2), pages 351-366, May.
  11. Daniel F. Garrett & Alessandro Pavan, 2012. "Managerial Turnover in a Changing World," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 120(5), pages 879 - 925.
  12. Bhagat, Sanjai & Bolton, Brian, 2014. "Financial crisis and bank executive incentive compensation," Journal of Corporate Finance, Elsevier, Elsevier, vol. 25(C), pages 313-341.

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