AFA2019会议论文（9）：Contracts and Incentives

AFA2019会议论文（9）：Contracts and Incentives

金融经济学 1周

Regulating Charlatans in High-Skill Professions

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Is Cash Still King: Why Firms Offer Non-Wage Compensation and the Implications for Shareholder Value

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Career Risk and Market Discipline in Asset Management

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CEO Incentives for Risk-Taking and Compensation Duration

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1、Regulating Charlatans in High-Skill Professions

Jonathan Berk, Stanford University
Jules van Binsbergen, University of Pennsylvania

Abstract

We model a market for a skill that is in short supply and high demand, where the presence of charlatans (professionals who sell a service that they do not deliver on) is an equilibrium outcome. We use this model to evaluate the standards and disclosure requirements that exist in these markets. We show that reducing the number of charlatans through regulation decreases consumer surplus. Although both standards and disclosure drive charlatans out of the market, consumers are still left worse off because of the resulting reduction in competition amongst producers. Producers, on the other hand, strictly benefit from the regulation, implying that the regulation we observe in these markets likely derives from producer interests. Using these insights, we study the factors that drive the cross-sectional variation in charlatans across professions. Professions with weak trade groups, skills in larger supply, shorter training periods and less informative signals regarding the professional’s skill, are more likely to feature charlatans.

原文链接：

https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=AFA2019&paper_id=111

2、Is Cash Still King: Why Firms Offer Non-Wage Compensation and the Implications for Shareholder Value

Tim Liu, University of North Carolina
Christos Makridis, Stanford University
Paige Ouimet, University of North Carolina
Elena Simintzi, University of British Columbia

Abstract

Over the past 40 years, the share of non-wage benefits in employee compensation grew from 5% to 30%. Using disaggregated data from Glassdoor, we first document a series of stylized facts about the availability of non-wage benefits and how these benefits are correlated with firm characteristics. We propose that firms use certain non-wage benefits to attract and retain specific employee groups, a hypothesis we test with maternity benefits and female talent. As predicted, we find that in industries and states where women are underrepresented and the supply of female talent is limited, firms offer better quality maternity benefits. We provide suggestive evidence that offering non-cash maternity benefits is associated with more balanced gender employee composition.

原文链接：

https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=AFA2019&paper_id=695

3、Career Risk and Market Discipline in Asset Management

Andrew Ellul, Indiana University, CEPR, CSEF, and ECGI
Marco Pagano, University of Naples Federico II
Annalisa Scognamiglio, University of Naples Federico II

Abstract

We establish a role for the labor market in disciplining asset managers by studying the impact of hedge fund liquidations on managers careers, using hand-collected data on 1,948 individuals. Top-level managers of funds liquidated after persistently poor relative performance suffer job demotion entailing an average yearly compensation loss of $664,000, while no scarring effects are present when liquidations are preceded by normal performance or for mid-level employees. Based on a model with moral hazard and adverse selection, these results can be ascribed to reputation loss by asset managers rather than career risk, and suggest that performance-induced liquidations supplement compensation-based incentives.

原文链接：

https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=AFA2019&paper_id=1284

4、CEO Incentives for Risk-Taking and Compensation Duration

Thomas Kubick, University of Kansas
John Robinson, Texas A&M University
Laura Starks, University of Texas

Abstract

We examine how boards structure CEO compensation contracts to offset contrasting managerial incentives from their compensation risk incentives (vega) and the length of their compensation contract (duration). We hypothesize and find that compensation contracts with greater sensitivity to stock return volatility have longer durations. In cross-sectional tests, we find this association to be stronger for certain firm and CEO characteristics. We confirm our results using FAS 123R as an exogenous shock. Overall, our results suggest that boards are less willing to grant short duration compensation contracts in the presence of greater compensation risk incentives.

原文链接：

https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=AFA2019&paper_id=1387

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