An analysis of net-outcome contracting with applications to equity-based compensation
研究了基于股票价格的股权薪酬合约，指出标准道德风险分析忽略支付对净结果的反馈，刻画了最优净结果合约的形状和绩效敏感性，并与最优总结果合约对比，对股权薪酬设计有启示。
Abstract Options, restricted stock, bonuses tied to total shareholder return, and similar equity-based compensation contracts stipulate payments that depend on stock price. Any such contract is a function of shareholder value net of the compensation payment, because stock price (1) is proportional to this net value or “net outcome” and (2) anticipates compensation-related payments and dilution. The net outcome, in turn, is reduced by the payment and so depends on the contract. Standard moral hazard analyses, wherein contractual payments are based on the gross outcome before any payment to the agent, overlook this dependency. We characterize the optimal net-outcome contract, describe its shape and pay-for-performance sensitivity, contrast it with the optimal gross-outcome contract, and discuss implications for equity-based compensation arrangements.