The economics of super managers

Nina Baranchuk; Glenn MacDonald; Jun Yang

doi:10.1093/rfs/hhr059

The economics of super managers

Nina Baranchuk
, Glenn MacDonald
, Jun Yang

Research output: Contribution to journal › Article › peer-review

40 Scopus citations

Abstract

We study a competitive model in which managers differ in ability and choose unobservable effort. Each firm chooses its size, how able a manager is to hire, and managerial compensation. The model can be considered an amalgam of agency and Superstars, where optimizing incentives enhances the firm's ability to provide a talented manager with greater resources. The model delivers many testable implications. Preliminary results show that the model is useful for understanding interesting compensation trends, for example, why CEO pay has recently become more closely associated with firm size. Allowing for firm productivity differences generally strengthens our results.

Original language	English
Pages (from-to)	3321-3368
Number of pages	48
Journal	Review of Financial Studies
Volume	24
Issue number	10
DOIs	https://doi.org/10.1093/rfs/hhr059
State	Published - Oct 2011

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author = "Nina Baranchuk and Glenn MacDonald and Jun Yang",

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The economics of super managers

Abstract

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