Clawback provisions and firm risk

Ilona Babenko (Arizona State University), Benjamin Bennett (The Ohio State University), John M. Bizjak (Texas Christian University), Jeffrey L. Coles (University of Utah), Jason J. Sandvik (University of Utah)

Panel OLS and GMM-IV estimates indicate that executives respond to the adoption of a compensation clawback provision by decreasing firm risk. The mechanisms that transmit incentives to decisions and decisions to risk appear to be more conservative investment and financial policies and preemptive management of ESG, legal, and cyberattack risks. The stock market reaction to the announcement of a clawback adoption, as well as post-adoption stock and accounting performance, are significantly and positively related to the actual and predicted reduction in firm risk. The reduction in firm risk, arising from adoption of a clawback policy, appears to benefit shareholders

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Year of publication:	[2019]
Authors:	Babenko, Ilona ; Bennett, Benjamin ; Bizjak, John M. ; Coles, Jeffrey L. ; Sandvik, Jason J.
Publisher:	[Columbus, Ohio] : The Ohio State University, Fisher College of Business, Charles A. Dice Center for Research in Financial Economics
Subject:	Clawback \| recoupment \| recover \| executive compensation \| employee pay \| accounting restatement \| fraud \| corporate governance \| Corporate Governance \| Corporate governance \| Managervergütung \| Executive compensation \| Führungskräfte \| Managers \| Leistungsentgelt \| Performance pay \| Vergütungssystem \| Compensation system \| Betrug \| Fraud \| Leistungsanreiz \| Performance incentive

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Extent:	1 Online-Ressource (circa 62 Seiten)
Series:	Fisher College of Business working paper series. - Columbus, Ohio : [Verlag nicht ermittelbar], ZDB-ID 2189279-9. - Vol. WP 2019, 13 Charles A. Dice Center Working Paper ; No. 2019-13 Fisher College of Business working paper series. - Columbus, Ohio : [Verlag nicht ermittelbar], ZDB-ID 2412551-9. - Vol. WP 2019-03, 013
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	10.2139/ssrn.3382498 [DOI]
Classification:	G32 - Financing Policy; Capital and Ownership Structure ; G34 - Mergers; Acquisitions; Restructuring; Corporate Governance ; J33 - Compensation Packages; Payment Methods ; M41 - Accounting ; M52 - Compensation and Compensation Methods and Their Effects (stock options, fringe benefits, incentives, family support programs) ; M55 - Labor Contracting Devices: Outsourcing; Franchising; Other
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012107693