A firm with modest commitment power optimally pays its worker more than she
produces. By committing to an expensive contract that future poachers must match,
firm and worker jointly price her services like a non-discriminating monopolist. Limited
commitment caps what the firm can promise; when the constraint binds, the wage
premium reflects commitment power, and cyclical poaching intensity generates bonus
cycles. The firm collects anticipated proceeds through the initial wage; when a wage
floor limits this collection, the firm claws back in work: juniors are inefficiently overworked,
effort declining with tenure, as in up-or-out careers in professional services and
academia.