Bonus Payments and Fund Managers' Behavior: Trans-Atlantic Evidence

Thomas P. Gehrig, Torben Lütje and Lukas Menkhoff ()
Authors registered in the RePEc Author Service: Torben Luetje ()

Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover from Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: This questionnaire survey of fund managers in the United States, Germany and Switzerland documents a distinctly positive influence of bonus payments on investment behavior on both sides of the Atlantic. Higher bonus payments are significantly related to higher working effort but not to risk taking. They also seem to induce fund managers to rely more on fundamental information. Findings within regions are confirmed by Trans-Atlantic evidence as US fund managers receive larger bonuses but also show the effects to a higher degree. The effects documented are stronger for relative than for absolute performance assessment.

Keywords: Fund managers; incentives; fundamental information (search for similar items in EconPapers)
JEL-codes: G23 G14 (search for similar items in EconPapers)
Date: 2008-12
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Related works:
Working Paper: Bonus Payments and Fund Managers’ Behaviour: Trans-Atlantic Evidence (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:han:dpaper:dp-411

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