This paper develops a competitive equilibrium model of CEO compensation and industry dynamics. CEOs make product pricing and product improvement decisions subject to shareholders’ compensation choices and idiosyncratic shocks to product quality. The choice of highpowered incentives optimally trades-o¤ the bene…ts from expected product improvements and the associated agency costs. In market equi...

W investigate whether public opinion influences the level and structure of executive compensation. During 1992–2008, the negativity of press coverage of chief executive officer (CEO) pay varied significantly, with stock options being the most criticized pay component. We find that after more negative press coverage of CEO pay, firms reduce option grants and increase less contentious types of pa...

Do international trade and technological change influence how firms create incentives for human capital? I present a model that incorporates agency problems into a framework with firm heterogeneity and human capital. My model indicates that trade liberalizations and skill-biased technological change alter the way how the largest firms in an economy incentivize their managers. Increases in manag...

Using a sample of US bank mergers from 1995 to 2012, we observe that the pre-post merger changes in CEO bonus are significantly negatively related to the strength of corporate governance within the bidding bank. This suggests that bonus compensation is not consistent with the “optimal contracting hypothesis”. Salary changes, on the other hand, are not affected by corporate governance but are po...

The association between CEO compensation and bank profitability has drawn substantial attention in recent years. study analyzes the relationship performance Bangladesh for 2010-2020. variables used are return on equity, CEOs salary, bonus, housing facilities, allowance, foreign trips. uses a 2SLS estimator to remove possible endogeneity create an unbiased result. results strongly suggest that C...