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Dynamic Incentive Accounts

  • Yuliy Sannikov

    (Princeton)

  • Xavier Gabaix

    (NYU)

  • Tomasz Sadzik

    (NYU)

  • Alex Edmans

    (Wharton)

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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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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Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/
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    [Lower salaries and no options? On the optimal structure of executive pay]
    ," Papers 07-41, Sonderforschungsbreich 504.
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