Arbeitspapier
Managerial Compensation Duration and Stock Price Manipulation
I build a model of optimal managerial compensation where managers each have a privately observed propensity to manipulate short-term stock prices. It is shown that this informational asymmetry reverses some of the conventional wisdom about the relationship between reliance on short-term pay and propensity to manipulate. The optimal compensation scheme features a negative relationship between pay duration and manager manipulation activity, reconciling theory with recent empirical findings (Gopalan et al., 2014). Further, the model predicts that managers who spend more resources manipulating short-term stock prices also put more effort into generating longterm firm value.
- Language
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Englisch
- Bibliographic citation
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Series: Bank of Canada Working Paper ; No. 2015-25
- Classification
-
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Information and Market Efficiency; Event Studies; Insider Trading
Corporate Finance and Governance: General
Personnel Management; Executives; Executive Compensation
- Subject
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Labour markets
Economic models
Recent economic and financial developments
- Event
-
Geistige Schöpfung
- (who)
-
Schroth, Josef
- Event
-
Veröffentlichung
- (who)
-
Bank of Canada
- (where)
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Ottawa
- (when)
-
2015
- DOI
-
doi:10.34989/swp-2015-25
- Handle
- Last update
-
20.09.2024, 8:24 AM CEST
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Schroth, Josef
- Bank of Canada
Time of origin
- 2015
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