| 来源类型 | Discussion paper
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| 规范类型 | 论文
|
| 来源ID | DP7836
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| DP7836 Risk and the CEO Market: Why Do Some Large Firms Hire Highly-Paid, Low-Talent CEOs? |
| Xavier Gabaix; Alex Edmans
|
| 发表日期 | 2010-05-24
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| 出版年 | 2010
|
| 语种 | 英语
|
| 摘要 | This paper presents a market equilibrium model of CEO assignment, pay and incentives under risk aversion and heterogeneous moral hazard. Each of the three outcomes can be summarized by a single closed-form equation. In assignment models without moral hazard, allocation depends only on firm size and the equilibrium is efficient. Here, talent assignment is distorted by the agency problem as firms involving higher risk or disutility choose less talented CEOs. Such firms also pay higher salaries in the cross-section, but economy-wide increases in risk or the disutility of being a CEO (e.g. due to regulation) do not affect pay. The strength of incentives depends only on the disutility of effort and is independent of risk and risk aversion. If the CEO affects the volatility as well as mean of firm returns, incentives rise and are increasing in risk and risk aversion. We calibrate the efficiency losses from various forms of poor corporate governance, such as failures in monitoring and inefficiencies in CEO assignment. The losses from misallocation of talent are orders of magnitude higher than from inefficient risk-sharing. |
| 主题 | Financial Economics
|
| 关键词 | Assignment
Executive compensation
Incentives
Market equilibrium
Risk
Talent
|
| URL | https://cepr.org/publications/dp7836
|
| 来源智库 | Centre for Economic Policy Research (United Kingdom)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/536674
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推荐引用方式
GB/T 7714 |
Xavier Gabaix,Alex Edmans. DP7836 Risk and the CEO Market: Why Do Some Large Firms Hire Highly-Paid, Low-Talent CEOs?. 2010.
|
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