Aversion to the variability of pay and the structure of executive compensation contracts
This paper presents a new implication of an aversion toward the variance of pay (“risk aversion”) for the structure of managerial incentive schemes. In a principal-agent model in which the effort of a manager with mean-variance preferences affects the mean of a performance measure, we find that man...
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| Format: | Article |
| Language: | English |
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Vilnius Gediminas Technical University
2015-09-01
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| Series: | Journal of Business Economics and Management |
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| Online Access: | https://journals.vgtu.lt/index.php/JBEM/article/view/2612 |