This paper uncovers a heretofore unrecognized link between durability on the demand side and agency theory. The theoretical arguments indicate that delegation of control and the appropriate choice of managerial incentive contract can provide explicit commitment to a future schedule of production for sellers of durable goods in imperfectly competitive markets that would mitigate the time-consistency problem induced by durability. The empirical implications for optimal compensation contracts are tested using data on compensation of top executives at large corporations. Consistent with the predictions of the analysis we find that the time-consistency problem of durable goods firms induces compensation practices away from strict profit maximization. In particular, it induces indexing to both profits and sales, lower elasticity of compensation to sales, longer term compensation incentives (e.g., restricted stock and stock options), greater pay-performance sensitivity, and greater relative performance evaluation.