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University of Birmingham, Birmingham, UK
Principal–Agent Theory: Why Bonuses may be Beneficial
Why Ideal Contracts may well be Unavailable
Implications for Contracts in the Financial Sector
Assessing the Case for Profit-Related Pay
Are Financial Sector Bonuses Actually Deserved?
Arguments against Restricting Financial Sector Bonuses
Some Technical Difficulties
Some Specific Practical Problems with Bonuses
The scale of bonuses paid by the world’s major banks in recent years is astounding. Cuomo (2009) presents the evidence of bonus payments and profits for nine leading US banks ...