search query: @author Narayanan, M. P. / total: 6
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| Author: | Narayanan, M. P. |
| Title: | Managerial incentives for short-term results. |
| Journal: | Journal of Finance
1985 : DEC, VOL. 40:5, p. 1469-1484 |
| Index terms: | MANAGERS INCENTIVES |
| Language: | eng |
| Abstract: | The American managers tend to make decisions that yield short-term gains at the expense of the long-term interests of the shareholders. The article attempt to investigate managerial incentives for such decisions. The author sets up a modified Harris-Homstrom model and derives the optimal wage policy for the manager. He shows that, when the manager has private information, there exist situations wherein he would make decisions which result in short-term profit but are detrimental to the stockholders' interests. Managers' interests for short-term goals are influenced by his experience, the firm's risk, and the duration of his contract. |
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