A simple model of managerial incentives with monitoring

IF 1.8 4区经济学 Q2 BUSINESS, FINANCE

International Review of Finance Pub Date : 2025-04-26 DOI:10.1111/irfi.70019

Gino Loyola

引用次数: 0

Abstract

We propose a model of corporate governance that characterizes the optimal managerial compensation scheme when the board of directors can monitor by auditing. The results reveal a significant substitution effect such that when monitoring is sufficiently weak, the optimal compensation depends on performance, but as it grows stronger, the incentive power of compensation declines. When monitoring is sufficiently strong, however, the compensation gives the manager full insurance. These properties are consistent with the reduction in executive pay-performance sensitivity observed after U.S. regulatory reforms aimed at improving corporate internal control.

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一个管理激励与监督的简单模型

本文提出了当董事会可以通过审计进行监督时，最优管理层薪酬方案的公司治理模型。结果表明，当监督足够弱时，最优薪酬取决于绩效，但当监督越来越强时，薪酬的激励能力就会下降。然而，当监督足够强大时，补偿给了经理充分的保障。这些特性与美国旨在改善公司内部控制的监管改革后观察到的高管薪酬绩效敏感性的降低是一致的。

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

International Review of Finance BUSINESS, FINANCE-

CiteScore

3.30

自引率

5.90%

发文量

期刊介绍： The International Review of Finance (IRF) publishes high-quality research on all aspects of financial economics, including traditional areas such as asset pricing, corporate finance, market microstructure, financial intermediation and regulation, financial econometrics, financial engineering and risk management, as well as new areas such as markets and institutions of emerging market economies, especially those in the Asia-Pacific region. In addition, the Letters Section in IRF is a premium outlet of letter-length research in all fields of finance. The length of the articles in the Letters Section is limited to a maximum of eight journal pages.