..., Vallendar, Germany. Editor’s note: Accepted by Jongwoon Choi, under the Senior Editorship of Michal Matějka. 14 02 2023 13 08 2024 16 08 2024 2025 managerial discretion discretionary bonus pool incentive contracting reciprocity fairness trust third-party...

... are available upon request. JEL Classifications: D91; J41; M41; M52. 2023 incentive contracting managerial discretion trust reciprocity fairness In this study, we focus on simple forms of explicit and implicit targets to increase their comparability. Specifically, we examine the use...

... potential biases and limitations. Subjectivity allows supervisors to incorporate qualitative, non-contractible performance information, which leads to improved incentive contracting. In particular, the use of subjectivity allows supervisors to incorporate forward-looking information and reflect the effects...