Bank Bonus Pay as a Risk Sharing Contract

• 成果类型: Article
• 署名作者: Efing, Matthias; Hau, Harald; Kampkoetter, Patrick; Rochet, Jean-Charles
• 署名单位: Hautes Etudes Commerciales (HEC) Paris; University of Geneva; Swiss Finance Institute (SFI); Eberhard Karls University of Tubingen
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhac030
• 发表日期: 2022
• 页码: 235
• 关键词: executive-compensation; corporate-investment; moral hazard; wages; management; EMPLOYMENT; insurance; FIRMS; LABOR; german

摘要

We argue that risk sharing motivates the bankwide structure of bonus pay. In the presence of financial frictions that make external financing costly, the optimal contract between shareholders and employees involves some degree of risk sharing whereby bonus pay partially absorbs negative earnings shocks. Using payroll data for 1.26 million employee-years in all functional divisions of Austrian, German, and Swiss banks, we uncover several empirical patterns in bonus pay that are difficult to rationalize exclusively with incentive theories of bonus pay but that support an important risk sharing motive.