Executive compensation and short-termist behaviour in speculative markets

• 成果类型: Article
• 署名作者: Bolton, Patrick; Scheinkman, Jose; Xiong, Wei
• 署名单位: Columbia University; Princeton University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1111/j.1467-937X.2006.00388.x
• 发表日期: 2006
• 页码: 577-610
• 关键词: investor psychology; managerial power; capital-markets; moral hazard; STOCK; OWNERSHIP; performance; liquidity; price; RISK

摘要

We present a multiperiod agency model of stock-based executive compensation in a speculative stock market, where investors have heterogeneous beliefs and stock prices may deviate from underlying fundamentals and include a speculative option component. This component arises from the option to sell the stock in the future to potentially overoptimistic investors. We show that optimal compensation contracts may emphasize short-term stock performance, at the expense of long-run fundamental value, as an incentive to induce managers to pursue actions which increase the speculative component in the stock price. Our model provides a different perspective on the recent corporate crisis than the rent extraction view of executive compensation.