Hoffmann, F. and Vladimirov, V. (2025). Worker Runs The Journal of Finance, 80(2):937--979.

The voluntary departure of hard-to-replace skilled workers worsens firm prospects, which can lead to additional departures. We develop a model in which firms design compensation to limit the risk of such {\textquotedblleft}worker runs.{\textquotedblright} To achieve cost-efficient retention, firms combine fixed wages with dilutable compensation{\textemdash}such as vesting equity or bonus pools{\textemdash}which pays remaining workers more when others leave but gets diluted otherwise. Compensating (identical) workers with differently structured compensation, that is, with a different mix of output-dependent and output-independent pay, can further mitigate the risk of worker runs by ensuring a critical retention level in a cost-efficient way.