Information-Based Stock Trading, Executive Incentives, and the Principal-Agent Problem
研究了基于信息的股票交易如何影响风险与激励的关系，发现更大风险会增加信息交易，从而增强高管激励并抵消负向风险激励关系，对董事会设计激励方案有参考价值。
We examine the role of information-based stock trading in affecting the risk–incentive relation. By incorporating an endogenous informed trading into an optimal incentive contracting model, we analytically show that, apart from reducing incentives, a greater risk increases the level of information-based trading, which consequently enhances executive incentives and offsets the negative risk–incentive relation. We calibrate the model and find that the economic magnitude of this incentive-enhancement effect is significant. Our empirical test using real-world executive compensation data lends strong support to the model prediction. Our results suggest that principals (boards of directors) should consider underlying stock trading characteristics when structuring executive incentives.