CEO Horizon, Optimal Pay Duration, and the Escalation of Short‐Termism
研究当经理人通过操纵业绩损害公司价值时，最优薪酬合同如何设计。发现合同会延迟支付，激励随时间加速归属，导致经理人在任期最后几年加剧操纵行为，并刻画了短期与长期薪酬的最优组合及归属期动态。
ABSTRACT This paper studies optimal contracts when managers manipulate their performance measure at the expense of firm value. Optimal contracts defer compensation. The manager's incentives vest over time at an increasing rate, and compensation becomes very sensitive to short‐term performance. This generates an endogenous horizon problem whereby managers intensify performance manipulation in their final years in office. Contracts are designed to encourage effort while minimizing the adverse effects of manipulation. We characterize the optimal mix of short‐ and long‐term compensation along the manager's tenure, the optimal vesting period of incentive pay, and the dynamics of short‐termism over the CEO's tenure.