# kaal:claim:2097160-007

**Claim.** Control rights in executive compensation contracts cannot sufficiently constrain ex post opportunism by executives, because of incomplete information, information asymmetry, bounded rationality, limited foresight, and transaction costs.

**Type.** failure  **Support.** argued

**Holds when.**

- principal agent relationship under incomplete contracting

**Source quote.**

> bounded rationality of contracting parties, the parties' limited cognition and foresight, and transaction costs, control rights in executive compensation contracts cannot account sufficiently for ex post opportunism of agents.

**From.** Wulf A. Kaal, *Contingent Capital in Executive Compensation* (2012), IV. Incomplete Contract Theory, page 29

**Cite as.** Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160

**Verify.** sha256 of source PDF `1e1f8aa246bce19f4658dbceb455c7c2a272aa5d63a9e9bdaa46a3a5a87680fc` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202012%20-%20Contingent%20Capital%20in%20Executive%20Compensation.pdf

**Failure mode.** Control rights fail against ex post opportunism  (family: agency-cost-and-managerial-opportunism)

**Topics.** ai-and-agents, corporate-governance

**Keywords.** control-rights, opportunism, incomplete-contracts, principal-agent

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.