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A note on CEO compensation, elimination tournaments and bankruptcy risk

Author

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  • Guido Friebel

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  • Alexander Matros

    ()

Abstract

We investigate an economy in which firms have different risks to go bankrupt. We observe two things: first, workers in firms with higher bankruptcy risk (bad firms) always work less than workers in good firms. Second, the CEOs of bad firms may nonetheless receive larger wages. Copyright Springer-Verlag Berlin/Heidelberg 2005

Suggested Citation

  • Guido Friebel & Alexander Matros, 2005. "A note on CEO compensation, elimination tournaments and bankruptcy risk," Economics of Governance, Springer, vol. 6(2), pages 105-111, July.
  • Handle: RePEc:spr:ecogov:v:6:y:2005:i:2:p:105-111
    DOI: 10.1007/s10101-005-0104-3
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    File URL: http://hdl.handle.net/10.1007/s10101-005-0104-3
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    Citations

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    Cited by:

    1. Kräkel, Matthias & Nieken, Petra, 2015. "Relative performance pay in the shadow of crisis," European Economic Review, Elsevier, vol. 74(C), pages 244-268.
    2. Berardi, Nicoletta & Seabright, Paul, 2011. "Professional Network and Career Coevolution," CEPR Discussion Papers 8632, C.E.P.R. Discussion Papers.
    3. repec:pit:wpaper:373 is not listed on IDEAS
    4. Timothy Mathews & Soiliou Namoro, 2008. "Participation incentives in rank order tournaments with endogenous entry," Journal of Economics, Springer, vol. 95(1), pages 1-23, October.

    More about this item

    Keywords

    Tournaments; agency; incentives; compensation;

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