TY  - UNPD
A1  - Hoffmann, Florian
A1  - Inderst, Roman
A1  - Opp, Marcus M.
T1  - Regulating deferred incentive pay
T2  - Working paper series / Institute for Monetary and Financial Stability ; 91
N2  - Our paper evaluates recent regulatory proposals mandating the deferral of bonus payments and claw-back clauses in the financial sector. We study a broadly applicable principal agent setting, in which the agent exerts effort for an immediately observable task (acquisition) and a task for which information is only gradually available over time (diligence). Optimal compensation contracts trade off the cost and benefit of delay resulting from agent impatience and the informational gain. Mandatory deferral may increase or decrease equilibrium diligence depending on the importance of the acquisition task. We provide concrete conditions on economic primitives that make mandatory deferral socially (un)desirable.
T3  - Working paper series / Institute for Monetary and Financial Stability - 91 
KW  - financial regulation
KW  - compensation design
KW  - principal-agent models
Y1  - 2015
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/37483
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-374832
UR  - http://www.imfs-frankfurt.de/fileadmin/user_upload/IMFS_WP/IMFS_WP_91.pdf
IS  - March, 2014
PB  - Johann Wolfgang Goethe-Univ., Inst. for Monetary and Financial Stability
CY  - Frankfurt am Main
ER  -