Agency, Firm Growth, and Managerial Turnover - Sciences Po Access content directly
Preprints, Working Papers, ... Year : 2013

Agency, Firm Growth, and Managerial Turnover


We study managerial incentive provision under moral hazard in a firm subject to stochastic growth opportunities. In our model, managers are dismissed after poor performance, but also when an alternative manager is better able to grow the firm. The optimal contract may involve managerial entrenchment, such that growth opportunities are foregone after good performance. Firms with better growth prospects have higher managerial turnover and more front-loaded compensation. The use of golden parachutes is suboptimal, unless the firm needs to incentivize its managers to truthfully report the arrival of growth opportunities. By ignoring the externality of the dismissal policy onto future managers, the optimal contract may imply excessive retention.
Fichier principal
Vignette du fichier
agency-growth-turnover-01122013.pdf (586.08 Ko) Télécharger le fichier
Origin : Files produced by the author(s)

Dates and versions

hal-03470530 , version 1 (08-12-2021)



Ronald Anderson, Cecilia Bustamante, Stéphane Guibaud. Agency, Firm Growth, and Managerial Turnover. 2013. ⟨hal-03470530⟩


23 View
17 Download


Gmail Facebook X LinkedIn More