Title :
Dynamic Model of Company Capital Budget and Manager Compensation Design
Author :
Zifan, Li ; Lei, Zhang
Author_Institution :
Int. Sch., Beijing Univ. of Posts & Telecommun., Beijing, China
Abstract :
Optimal contact for the problem of company budget and manager compensation design is proposed under both two-period and three-period, with a bonus pool. If the agent expects that the bonus in the bonus pool will not be allocated totally, he will require a higher bonus coefficient of the second period to provide enough incentive. If the principal expects that all of the bonus in the bonus pool will be allocated, he will gradually reduce the bonus coefficient in each period to maximize his own interest.
Keywords :
budgeting; incentive schemes; bonus pool; company capital budget; dynamic model; incentive; manager compensation design; Companies; Contracts; Distribution functions; Fellows; Finance; Hazards; Investments; bonus pool; capital budget; compensation design; principal-agent problem;
Conference_Titel :
Intelligent Computation Technology and Automation (ICICTA), 2011 International Conference on
Conference_Location :
Shenzhen, Guangdong
Print_ISBN :
978-1-61284-289-9
DOI :
10.1109/ICICTA.2011.265
