The Effect of Risk on the CEO Market

被引：81
作者：
Edmans, Alex [1 ]
Gabaix, Xavier [2 ,3 ,4 ]
机构：
[1] Univ Penn, Wharton Sch, Philadelphia, PA 19104 USA
[2] NYU, Stern Sch Business, New York, NY 10003 USA
[3] CEPR, London, England
[4] NBER, Cambridge, MA 02138 USA
来源：
REVIEW OF FINANCIAL STUDIES | 2011年 / 24卷 / 08期
关键词：
G34; J33; OPTIMAL INCENTIVE CONTRACTS; CONTINUOUS-TIME; EQUITY GRANTS; PRINCIPAL; COMPENSATION; COMPETITION; SELECTION; MODEL; PAID; PAY;
D O I：
10.1093/rfs/hhq153
中图分类号：
F8 [财政、金融];
学科分类号：
0202 ;
摘要：
This article presents a market equilibrium model of CEO assignment, pay, and incentives under risk aversion and moral hazard. Each of the three outcomes can be summarized by a single closed-form equation. In the presence of moral hazard, assignment is distorted from positive assortative matching on firm size as firms with 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 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 can affect firm risk, incentives rise and are increasing in risk and risk aversion. We calibrate the losses from various forms of poor corporate governance, such as failures in monitoring and inefficiencies in CEO assignment.
引用
收藏
页码：2822 / 2863
页数：42
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