Selection versus incentives in incentive pay: Evidence from a matching model
S Xia - Proceedings of Paris December 2019 Finance Meeting …, 2018 - papers.ssrn.com
Proceedings of Paris December 2019 Finance Meeting EUROFIDAI-ESSEC, 2018•papers.ssrn.com
Higher incentive pay is associated with higher firm value. I introduce a model of CEO-firm
matching to disentangle the two confounding effects that drive this result. First, higher
incentive pay directly induces more effort; second, talented CEOs sort into firms pay higher
incentive pay. I find that both effects contribute to the result, with the selection effect
accounting for almost one-quarter of the total effect. The relative importance of the selection
effect is the largest in submarkets with high talent mobility and in more recent years.
matching to disentangle the two confounding effects that drive this result. First, higher
incentive pay directly induces more effort; second, talented CEOs sort into firms pay higher
incentive pay. I find that both effects contribute to the result, with the selection effect
accounting for almost one-quarter of the total effect. The relative importance of the selection
effect is the largest in submarkets with high talent mobility and in more recent years.
Abstract
Higher incentive pay is associated with higher firm value. I introduce a model of CEO-firm matching to disentangle the two confounding effects that drive this result. First, higher incentive pay directly induces more effort; second, talented CEOs sort into firms pay higher incentive pay. I find that both effects contribute to the result, with the selection effect accounting for almost one-quarter of the total effect. The relative importance of the selection effect is the largest in submarkets with high talent mobility and in more recent years.
papers.ssrn.com
以上显示的是最相近的搜索结果。 查看全部搜索结果