TY  - JOUR
AU  - Bolton,Patrick
AU  - Scheinkman,Jose
AU  - Xiong,Wei
TI  - Pay for Short-Term Performance: Executive Compensation in Speculative Markets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12107
PY  - 2006
Y2  - March 2006
UR  - http://www.nber.org/papers/w12107
L1  - http://www.nber.org/papers/w12107.pdf
N1  - Author contact info:
Patrick Bolton
Columbia Business School
804 Uris Hall
New York, NY 10027
Tel: 212/854-9245
Fax: 212/854-8059
E-Mail: pb2208@columbia.edu

Jose A. Scheinkman
Department of Economics
Princeton University
Princeton, NJ  08544-1021
Tel: 609/258-4020
Fax: 609/258-0771
E-Mail: joses@princeton.edu

Wei Xiong
Princeton University
Department of Economics
Bendheim Center for Finance
Princeton, NJ  08450
Tel: 609/258-0282
Fax: 609/258-0771
E-Mail: wxiong@princeton.edu
AB  - We argue that the root cause behind the recent corporate scandals associated with CEO pay is the technology bubble of the latter half of the 1990s. Far from rejecting the optimal incentive contracting theory of executive compensation, the recent evidence on executive pay can be reconciled with classical agency theory once one expands the framework to allow for speculative stock markets.
ER  -