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SUMMARY:COMMON OWNERSHIP\, COMPETITION\, AND TOP MANAGEMENT INCENTIVES - M
 artin Schmalz\, Associate Professor of Finance\, Saïd Business School\, U
 niversity of Oxford
DTSTART:20191113T130000Z
DTEND:20191113T140000Z
UID:TALK133672@talks.cam.ac.uk
CONTACT:Emily Brown
DESCRIPTION:When one firm's strategy affects other firms' value\, optimal 
 executive incentives depend on whether shareholders have interests in only
  one or in multiple firms. Performance sensitive contracts induce manageri
 al effort to reduce costs\, and lower costs induce higher output. Hence\, 
 greater managerial effort can lead to lower product prices and industry pr
 ofits. Therefore\, steep managerial incentives can be optimal for a single
  firm and at the same time violate the interests of common owners of sever
 al firms in the same industry. Empirically\, managerial wealth is more sen
 sitive to performance when a firm's largest shareholders do not own large 
 stakes in competitors.
LOCATION:LT2\, Cambridge Judge Business School
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