Optimal CEO turnover

DOI10.1016/J.JET.2022.105475MaRDI QIDQ2155243zbMATH OpenOpenAlexFDO

Authors Cheng Wang, Youzhi Yang

Publication date 15 July 2022

Published in Journal of Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/j.jet.2022.105475

zbMATH Keywords

moral hazardlimited commitmentoptimal contractingoutside optionCEO compensation and turnover

Mathematics Subject Classification ID

Contract theory (moral hazard, adverse selection) (91B41) Principal-agent models (91B43)

Recommendations

• When to fire a CEO: optimal termination in dynamic contracts
• Outside opportunities and termination
• Optimal timing of management turnover under agency problems
• Dynamic incentive contracts with termination threats
• Optimal self-enforcement and termination

Cites work

• A Continuous-Time Version of the Principal–Agent Problem
• A Theory of Wage Dynamics
• A duality approach to continuous-time contracting problems with limited commitment
• Market-based incentives
• Optimal self-enforcement and termination
• Outside opportunities and termination
• Repeated moral hazard and one-sided commitment
• Self-Enforcing Wage Contracts
• Stochastic search equilibrium
• Termination of dynamic contracts in an equilibrium labor market model
• When to fire a CEO: optimal termination in dynamic contracts

Cited in

(8)

• Optimal timing of management turnover under agency problems
• Promotion, turnover, and compensation in the executive labor market
• Monitoring, moral hazard, and turnover
• When to fire a CEO: optimal termination in dynamic contracts
• A dynamic model of managerial entrenchment and the positive incentives it creates
• Are CEOs expected utility maximizers?
• A conditional logit model for executive incentives
• Performance pay, CEO dismissal, and the dual role of takeovers

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