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|Title:||Performance-based pay : sharing prosperity and misery.||Authors:||Low, Buen Sin.||Keywords:||DRNTU::Business||Issue Date:||2006||Abstract:||This paper discusses the risk transfer effect and wealth transfer effect of three types of firm-wide cash performance-based pay plans - the incentive pay plan, the pay-at-risk plan, and the pure misery-sharing plan. The valuation models for each type of performance-based pay plan are developed to quantify their wealth transfer effect between shareholders and employees. The models also suggest that there is a risk transfer effect from employees to the shareholders for all three types of performance-based pay. This risk transfer effect is larger for firms that have a higher financial leverage or have a more volatile business environment.||URI:||http://hdl.handle.net/10356/7040||Rights:||Nanyang Technological University||Fulltext Permission:||restricted||Fulltext Availability:||With Fulltext|
|Appears in Collections:||NBS Research Reports (Staff & Graduate Students)|
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