Arbeitspapier

Work-Related Perks, Agency Problems, and Optimal Incentive Contracts

This paper examines the effects of work-related perks, such as corporate jets and limousines, nice offices, secretarial staff, etc., on the optimal incentive contract. In a linear contracting framework, perks characterized by complementarities between production and consumption improve the trade-off between incentives and insurance that determines the optimal contract for a risk-averse agent. We show that (i) the perk may be offered even if its direct consumption and productivity benefits are offset by its cost; (ii) the perk will be offered for free; (iii) agents in more uncertain production environments will receive more perks; (iv) senior executives should receive both more perks and stronger explicit incentives; and (v) better corporate governance can lead firms to award their CEOs more perks. Our analysis also offers insights into the firms' decisions about how much autonomy they should grant to their employees and about optimal perk provision when managers and workers are organized in teams.

Sprache
Englisch

Erschienen in
Series: Queen's Economics Department Working Paper ; No. 1107

Klassifikation
Wirtschaft
Thema
Job Perks
Agency Problems
Optimal Incentive Contracts

Ereignis
Geistige Schöpfung
(wer)
Marino, Anthony
Zabojnik, Jan
Ereignis
Veröffentlichung
(wer)
Queen's University, Department of Economics
(wo)
Kingston (Ontario)
(wann)
2006

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Marino, Anthony
  • Zabojnik, Jan
  • Queen's University, Department of Economics

Entstanden

  • 2006

Ähnliche Objekte (12)