Share repurchases, equity issuances, and the optimal design of executive pay
By: Jesse M. Fried
Contributors: John M. Olin Center for Law, Economics, and Business
Series: Discussion paper -- no. 696; Discussion paper (John M. Olin Center for Law, Economics, and Business : Online) -- no. 696.
Publisher: Harvard Law School
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Subjects: Stock repurchasing; Finance; Corporations; Mathematical models; Law and legislation; Salaries; Executives
Description: "Abstract: This Article identifies a cost to public investors of tying executive pay to the future value of a firm's stock---even its long-term value.  In particular, such an arrangement can incentivize executives to engage in share repurchases (when the current stock price is low) and equity issuances (when the current stock price is high) that reduce "aggregate shareholder value;" the amount of value flowing to all the firm's shareholders over time.  The Article also puts forward a mechanism that ties executive pay to aggregate shareholder value and thereby eliminates the identified distortions"--John M. Olin Center for Law, Economics, and Business web site.
Notes: Title from PDF file as viewed on 5/26/2011.

Includes bibliographical references.

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