Dinh, TamiTamiDinhCheng, M.M.ChengSchultze, W.W.Schultze2023-04-132023-04-132014-08-02https://www.alexandria.unisg.ch/handle/20.500.14171/86553This experiment examines the impact of deferred bonus payments and employment horizon on managers' investment decisions. Deferred bonus is an important element of a "bonus bank" scheme designed to mitigate managers' tendency to avoid long-term investments that can reduce their bonuses (the "impatient manager" problem). Consistent with construal level theory from psychology, we find that bonus deferral increases managers' willingness to make a Bonus decreasing investment. Using a moderated mediation model we find that bonus deferral influences managers' investment decisions by encouraging managers to place greater importance on advancing their company's long-term interests and on improving their reputation within the company; but these mediation effects are significant only when participants have short employment horizon. Our study contributes to the debate on effective managerial compensation by showing that a simple deferral of bonus payments can reduce the negative consequences related to managerial myopia.enconference paper