High-powered incentives and fraudulent behavior: Stock-based versus stock option-based compensation

Rainer Andergassen

Economics Letters, 2008, vol. 101, issue 2, 122-125

Abstract: This paper examines the trade-off shareholders face between providing managers with incentives to exert beneficial effort and to engage in costly fraudulent activity. We provide a solution to the optimal compensation problem, given that shareholders can either grant (restricted) stock or stock options and given fixed average compensation costs.

Keywords: Executive; compensation; Executive; stock; options; Restricted; stock; Fraud; Incentives (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (8)

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Related works:
Working Paper: High powered Incentives and Fraudulent Behavior: Stock based versus Stock Option based Compensation (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:101:y:2008:i:2:p:122-125

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