A copy of this work was available on the public web and has been preserved in the Wayback Machine. The capture dates from 2017; you can also visit the original URL.
The file type is
This paper re-examines executive incentive compensation, using a principal-agent model in which the principal is downside risk averse, or prudent (as a number of empirical facts, regulations and scholarly works suggest it should be), instead of risk neutral (as it has been commonly assumed so far in the literature). We ...nd that optimal incentive pay should then be 'approximately concave' in performance (in a precise sense), the approximation being closer the more prudent the principal isdoi:10.2139/ssrn.1953548 fatcat:6ozc3zt3trfypeahana5njvbvy