| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP11298
|
| DP11298 Liquidity, Information Aggregation, and Market-Based Pay in an Efficient Market |
| Florian Heider
|
| 发表日期 | 2016-05-26
|
| 出版年 | 2016
|
| 语种 | 英语
|
| 摘要 | This paper studies the usefulness of making the income of a CEO depend on the stock price of the firm he runs. We assume the stock market is efficient and find that other public information about CEO performance, e.g., accounting information, is not used to determine CEO pay. But because of the feedback loop between CEO actions and the stock price, the price does not fully reflect the consequences of CEO shirking for the value of the firm. The optimal incentive contract increases stock-based pay in order to increase the sensitivity of CEO income to shirking and thus deter it. This effect is stronger when traders have worse information, which can explain the prevalence of stock-based pay in hard-to-value firms. Our model derives a measure of the wedge between financial and economic efficiency, and generates new insights about the role of market conditions such as liquidity for optimal pay contracts. |
| 主题 | Financial Economics
|
| 关键词 | Market-based pay
Efficient markets
Liquidity
Information aggregation
|
| URL | https://cepr.org/publications/dp11298
|
| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
|
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/540116
|
推荐引用方式
GB/T 7714 |
Florian Heider. DP11298 Liquidity, Information Aggregation, and Market-Based Pay in an Efficient Market. 2016.
|
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