Paying for Staying: Managerial Contracts and the Retention Motive
36 Pages Posted: 2 Apr 2012
Date Written: March 20, 2012
Talented managers may leave the firm in order to work elsewhere. Focusing on the portability of managers-resources, we develop a model in which managerial compensation is designed to prevent inefficient departure. The model rationalizes the widespread use of flat salaries in combination with performance-vesting stock options and is consistent with observed differences in compensation contracts across individuals, firms, industries, and countries.
Suggested Citation: Suggested Citation
Ellingsen, Tore and Kristiansen, Eirik Gaard, Paying for Staying: Managerial Contracts and the Retention Motive (March 20, 2012). NHH Dept. of Economics Discussion Paper No. 8/2012, Available at SSRN: https://ssrn.com/abstract=2033122 or http://dx.doi.org/10.2139/ssrn.2033122
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