Since the commencement of industrial reform in Chinna, most CHinese state-owneu enterprises have adopted a deferred executive compensation policy to provide incentives for their management teams. However, the effectiv...Since the commencement of industrial reform in Chinna, most CHinese state-owneu enterprises have adopted a deferred executive compensation policy to provide incentives for their management teams. However, the effectiveness of such a policy needs to be evaluated In this paper, we specify a model of deferred executive compensation policy, in which the compensation for executives is contingent on firms ＇future revenue. The model suggests that under deferred executive compensation policies, managers exhibit an increasing level of effort in every period Furthermore, the deferred compensation policy encourages managers to make long-term investments, which might generate revenue even after the termination of managerial contracts.展开更多
文摘Since the commencement of industrial reform in Chinna, most CHinese state-owneu enterprises have adopted a deferred executive compensation policy to provide incentives for their management teams. However, the effectiveness of such a policy needs to be evaluated In this paper, we specify a model of deferred executive compensation policy, in which the compensation for executives is contingent on firms ＇future revenue. The model suggests that under deferred executive compensation policies, managers exhibit an increasing level of effort in every period Furthermore, the deferred compensation policy encourages managers to make long-term investments, which might generate revenue even after the termination of managerial contracts.
