Performance Incentive Fees: An Agency Theoretic Approach

Laura T. Starks

Journal of Financial and Quantitative Analysis, 1987, vol. 22, issue 1, 17-32

Abstract: This paper employs recent developments in agency theory to study the impact that compensation contracts have on portfolio management investment decisions in a restricted mean-variance world. Two types of incentive contracts for mutual fund managers are analyzed and compared. The results show that the “symmetric” contract, while not necessarily eliminating agency costs, dominates the “bonus” contract in aligning the manager's interests with those of the investor.

Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (92)

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jfinqa:v:22:y:1987:i:01:p:17-32_01

Access Statistics for this article

More articles in Journal of Financial and Quantitative Analysis from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().