Timeliness, Accuracy, and Relevance in Dynamic Incentive Contracts

57 Pages Posted: 19 Mar 2022

See all articles by Peter O. Christensen

Peter O. Christensen

Copenhagen Business School - Department of Finance

Gerald A. Feltham

University of British Columbia (UBC) - Sauder School of Business

Christian Hofmann

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management)

Florin Sabac

University of Alberta - Department of Accounting, Operations & Information Systems

Date Written: November 26, 2021

Abstract

The present study began with Jerry Feltham’s invitation to present at the Stanford Summer Camp in August 2003. As we were variously involved in related work on performance measurement and dynamic incentives, Peter, Jerry, Christian, and Florin teamed up and the result was Christensen, Feltham, Hofmann, and Sabac (2003). The present study is an update of the unpublished Stanford Summer Camp version dated July 3, 2003. The 2003 manuscript was a team effort under Jerry’s guidance, the current update was completed by Christian and Florin.

Keywords: Dynamic incentives, Performance measure precision, contract renegotiation

JEL Classification: M40, M52, D86

Suggested Citation

Christensen, Peter Ove and Feltham, Gerald A. and Hofmann, Christian and Sabac, Florin, Timeliness, Accuracy, and Relevance in Dynamic Incentive Contracts (November 26, 2021). Available at SSRN: https://ssrn.com/abstract=4028836 or http://dx.doi.org/10.2139/ssrn.4028836

Peter Ove Christensen

Copenhagen Business School - Department of Finance ( email )

Solbjerg Plads 3
Frederiksberg, DK-2000
Denmark
+45 6140 3237 (Phone)

Gerald A. Feltham

University of British Columbia (UBC) - Sauder School of Business

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Christian Hofmann (Contact Author)

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Florin Sabac

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada

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