Capital Budgeting in Multidivision Firms: Information, Agency, and Incentives
研究拥有两个投资项目的企业如何优化资本分配和经理薪酬，发现经理报告项目质量高时获得更高绩效薪酬和更低底薪，企业通常投资不足且经理资源利用不足。
We examine optimal capital allocation and managerial compensation in a firm with two investment projects (divisions) each run by a risk-neutral manager who can provide (i) (unverifiable) information about project quality and (ii) (unverifiable) access to value-enhancing, but privately costly resources. The optimal managerial compensation contract offers greater performance pay and a lower salary when managers report that their project is higher quality. The firm generally underinvests in capital and managers underutilize resources (relative to first-best). We also derive cross-sectional predictions about the sensitivity of investment in one division to the quality of investment opportunities in the other division, and the relative importance of division-level and firm-level performance-based pay in managerial compensation contracts.