Firm Performance Pay as Insurance against Promotion Risk

IF 7.6 1区经济学 Q1 BUSINESS, FINANCE

Journal of Finance Pub Date : 2024-08-12 DOI:10.1111/jofi.13379

ALVIN CHEN

引用次数: 0

Abstract

The prevalence of pay based on risky firm outcomes for nonexecutive workers presents a puzzling departure from conventional contract theory, which predicts insurance provision by the firm. When workers at the same firm compete against each other for promotions, the optimal contract features pay based on firm outcomes as insurance against promotion risk. The model's predictions are consistent with many observed phenomena, such as performance-based vesting and overvaluation of equity pay by nonexecutive workers. It also generates novel predictions linking a firm's hierarchy to its workers' pay structure.

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企业绩效薪酬是晋升风险的保险

非高管员工的薪酬普遍基于有风险的公司结果，这与传统的契约理论有很大不同，传统契约理论预测由公司提供保险，而非高管员工的薪酬普遍基于有风险的公司结果，这令人费解。当同一公司的员工为晋升而相互竞争时，最优合同的特点是根据公司结果支付薪酬，作为晋升风险的保险。该模型的预测与许多观察到的现象一致，如基于绩效的归属和非执行员工对股权薪酬的高估。该模型还提出了新颖的预测，将公司的等级制度与员工的薪酬结构联系起来。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Finance Multiple-

CiteScore

12.90

自引率

2.50%

发文量

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