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When Less Is More: The Benefit Of Limits On Executive Pay, Peter Cebon, Benjamin Hermalin
When Less Is More: The Benefit Of Limits On Executive Pay, Peter Cebon, Benjamin Hermalin
Peter Cebon
We derive conditions under which limits on executive compensation can enhance efficiency and benefit shareholders (but not executives). Having their hands tied in the future allows a board of directors to credibly enter into relational contracts with executives that are more efficient than performance-contingent contracts. This has implications for the ideal composition of the board. The analysis also offers insights into the political economy of executive-compensation reform.
Patterns Of Debt Use In Small Businesses: A Non-Parametric Analysis, Atreya Chakraborty
Patterns Of Debt Use In Small Businesses: A Non-Parametric Analysis, Atreya Chakraborty
Atreya Chakraborty
This paper uses non-parametric techniques to examine patterns of debt use by small firms and how such patterns differ across firm categories. The methodological goal is to use the richness of the firm level data and allow convincing presentations with minimum of assumptions. The procedures used provide easily comprehendible graphical descriptions of the data. The procedures augment what can be discerned from descriptive statistics by accounting for differential weights and allowing for clustering that is a native feature of cross-sectional data. We also investigate how firms could benefit if credit availability improves. Though a model-based analysis would be required to …