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Serial CEO Incentives and the Structure of Managerial Contracts


Mariassunta Giannetti


Stockholm School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)
February 25, 2011

Journal of Financial Intermediation, Forthcoming

Abstract:     
I explore CEOs' incentives to select firm strategies and to acquire firm-specific skills when CEOs have job-hopping opportunities. Several features of managerial compensation, such as benchmarking of pay to larger and more prestigious companies, payments unrelated to past performance, unrestricted stock awards for highly paid CEOs, long-term incentives, and higher pay in companies granting long-term incentives, emerge in the optimal contract. I argue that the model can explain the change in the structure and the surge in U.S. CEO compensation as well as differences across countries and across firms within a country.

Accepted Paper Series


Date posted: February 28, 2011  

Suggested Citation

Giannetti, Mariassunta, Serial CEO Incentives and the Structure of Managerial Contracts (February 25, 2011). Journal of Financial Intermediation, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1769669

Contact Information

Mariassunta Giannetti (Contact Author)
Stockholm School of Economics ( email )
P.O. Box 6501
Sveavagen 65
SE-113 83 Stockholm
Sweden
+46 8 736 9607 (Phone)
+46 8 312 327 (Fax)
HOME PAGE: http://www2.hhs.se/personal/giannetti
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Feedback to SSRN (Beta)


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