Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel - 2022
low. The optimal contract sometimes involves performance shares: the CEO is paid a constant share of output if it is … is slack, the optimal contract continues to involve pay-for-performance, to address the CEO's fairness concerns and … ensure his participation. Thus, the firm can implement strictly positive levels of effort "for free." This rationalizes pay-for-performance …