Incentive and Supervisory Contract between Special Committees and CEO Based on the Evolutionary Game Model

Table 1

Parameters and variables symbol descriptions.

Parameters	Descriptions
	Productive activity of CEO
	Self-interested behaviour of CEO
	Total salary paid to CEO
	Fixed component of total salary
	CEO’s cost
	CEO’s utility
	Sensitivity of performance to productive activities
	Sensitivity of performance to CEO self-interested behaviour
	Firm’s performance
	Final gross cash flow
	Sensitivity of final gross cash flow to productive activities
	Sensitive coefficient of final gross cash flow to self-interested behaviour
	Net value of the firm
	A fixed salary paid to audit committee
	Correlation coefficient between the special committees which link their utility with the net value of the firm
	An incentive coefficient adopted by compensation committee
	Compensation committee’s utility
	The supervision of the audit committee
	Audit committee’s cost
	Audit committee’s utility
	The probability that CEO adopts self-interested behaviour
	The probability that compensation committee adopts incentive strategy
	The probability that audit committee adopts supervisory strategy