We study the relation between firm growth and optimal managerial contracting under moral hazard when a long-lived firm is operated by a sequence of managers. In our model, firms replace their managers not only upon poor performance to provide incentives, but also when outside managers are at a comparative advantage to lead the firm through a new growth phase. Firms with better investment prospects have higher managerial turnover and rely on more front-loaded compensation schemes. Realized firm growth depends jointly on the exogenous arrival of growth opportunities and the severity of the moral hazard problem. Whenever agency constitutes an obstacle to firm growth, excessive managerial retention adds to agency costs due to a contractual externality affecting future managers.