Arbeitspapier
Bank Bonus Pay as a Risk Sharing Contract
We argue that risk sharing motivates the bank-wide structure of bonus pay. In the presence of financial frictions that make external financing costly, the optimal contract between shareholders and employees involves some degree of risk sharing whereby bonus pay partially absorbs earnings shocks. Using payroll data for 1:26 million employee-years in all functional divisions of Austrian, German, and Swiss banks, we uncover several empirical patterns in bonus pay that are difficult to rationalize with incentive theories of bonus pay - but support an important risk sharing motive. In particular, bonuses respond to performance shocks that are outside the control of employees because they originate in other bank divisions or even outside the bank.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 7495
- Klassifikation
-
Wirtschaft
Financial Institutions and Services: General
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Firm Behavior: Empirical Analysis
- Thema
-
banker compensation
risk sharing
bonus pay
operating leverage
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Efing, Matthias
Hau, Harald
Kampkötter, Patrick
Rochet, Jean-Charles
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2019
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 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.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Efing, Matthias
- Hau, Harald
- Kampkötter, Patrick
- Rochet, Jean-Charles
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2019
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