Hoffmann, Florian
[VerfasserIn]
;
Inderst, Roman
[Sonstige Person, Familie und Körperschaft];
Opp, Marcus M.
[Sonstige Person, Familie und Körperschaft]
The Economics of Deferral and Clawback Requirements
: An Indirect Tax Approach to Compensation Regulation
Erschienen in:Swedish House of Finance Research Paper ; No. 19-3
Umfang:
1 Online-Ressource (49 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2284337
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 21, 2019 erstellt
Beschreibung:
This paper proposes an indirect tax approach to derive positive and normative implications of regulatory interference in compensation contracts, focusing on recent mandatory deferral and clawback requirements in the financial sector. Moderate deferral requirements for bonus-pay typically lead to lower bank failure rates by inducing shareholders to incentivize more risk management effort from their managers, whereas stringent deferral requirements achieve the opposite. Additional clawback requirements prevent such backfiring only when competition for managerial talent is high. We characterize the optimal calibration of deferral and clawback requirements depending on the information environment, managers' outside options and their interaction with capital regulation