Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel - 2021
it should do so. Signals that indicate the output distribution has shifted to the left (e.g. weak industry performance … volatility) decrease high thresholds and increase low thresholds. Surprisingly, “good” signals of performance need not reduce the … threshold. Applying our model to performance-based vesting, we show that performance measures should affect the strike price …