Agency, Firm Growth, and Managerial Turnover

• 成果类型: Article
• 署名作者: Anderson, Ronald W.; Bustamante, M. Cecilia; Guibaud, Stephane; Zervos, Mihail
• 署名单位: University of London; London School Economics & Political Science; University System of Maryland; University of Maryland College Park
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12583
• 发表日期: 2018
• 页码: 419-464
• 关键词: repeated moral hazard; ceo turnover; executive-compensation; continuous-time; security design; DYNAMIC AGENCY; performance; CONTRACTS; replacement; INVESTMENT

摘要

We study managerial incentive provision under moral hazard when growth opportunities arrive stochastically and pursuing them requires a change in management. A trade-off arises between the benefit of always having the right manager and the cost of incentive provision. The prospect of growth-induced turnover limits the firm's ability to rely on deferred pay, resulting in more front-loaded compensation. The optimal contract may insulate managers from the risk of growth-induced dismissal after periods of good performance. The evidence for the United States broadly supports the model's predictions: Firms with better growth prospects experience higher CEO turnover and use more front-loaded compensation.