Maximizing The Market Value of A Firm to Choose Dynamic Policies for Managerial Hiring, Compensation, Firing and Tenuring  

Oleh:

Acharya, Sankarshan

Jenis: Article from Bulletin/Magazine
Dalam koleksi: INTERNATIONAL ECONOMIC REVIEW vol. 33 no. 2 (1992), page 373-398.
Topik: market value; market value; policies; managerial hiring; compensation; firing; tenuring

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: II49.2 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Sequentially incentive compatible policies for compensation, replacement and tenuring of chief executive officers (CEO s) exist when a firm maximizes its market value and CEOs maximize their expected utility of wealth. In equilibrium, these policies induce CEO s to implement their firm's highest profit potential. The market value of a firm increases following replacement of CEO s. The probability of removal of a CEO decreases in the expected profits of the firm, but increases in the CEO's risk aversion, the wage he can receive from the next best job opportunity, the cost of implementing instructions, and the firm's cost of capital.

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