Search Results
Showing results 1 to 3 of approximately 3.
(refine search)
Working Paper
CEO pay and the market for CEOs
Competitive sorting models of the CEO labor market (e.g., Edmans, Gabaix and Landier (2009)) predict that differences in CEO productive abilities, or "talent", should be an important determinant of CEO pay. However, measuring CEO talent empirically represents a major challenge. In this paper, we document reliable evidence of pay for CEO credentials and argue that the evidence is consistent with models of the CEO labor market. Our main finding is that boards' compensation decisions reward several reputational, career, and educational credentials of CEOs, with newly-appointed CEOs earning a 5 ...
Conference Paper
The future of regulation of the financial services industry: from control instruments to certification requirements
This paper advocates a shift in regulatory design in light of the increasingly competitive and dynamic environment of banking. Intrusive, control-oriented direct and indirect approaches to regulation have become increasingly costly. We advocate regulation that focuses on setting minimum requirements, i.e., certification requirements. Supervision would then primarily aim at verifying compliance. The viability of this approach requires a well-developed financial system and adequate internal control systems, primarily to align incentives within institutions. The analysis includes an industrial ...
Journal Article
Compensation and risk incentives in banking and finance
We review why executive compensation contracts are often structured the way they are, analyze risk incentives stemming from various pay schemes, and examine the tendency of the banking and finance industry toward excessive risk-taking. Studying the typical executive pay structures in banking and finance before the financial crisis reveals some potentially problematic practices. These practices may have encouraged ?short-termism? and excessive risk-taking, which are two behaviors bank regulators aim to prevent with their recently issued guidance on incentive compensation.