In this study we analyze how CEO risk incentives affect the efficiency of research and development (R&D) investments … may induce managers to overinvest in inefficient R&D projects and therefore hurt firm performance …

interquartile change in the distribution of CEO pay translates in a reduction of the failure risk probability by approximately 21 … failure risk. The effectiveness of CEO pay is strengthened among well-governed firms, whereas tournament incentives are … essential when there is high CEO succession risk. Both measures of executive pay are associated with better financial reporting …

2008 financial crisis. Strong and weak banks also stand apart: managers from weak banks took more risk than their peers in …This paper solves the dynamic investment problem of a risk averse agent compensated with a performance related bonus … principal experiences financial stress. Thus weaker financial corporations explain the downwards trend in risk-taking after the …

effect of risk-taking incentives on both the magnitude and composition of firm risk. We find that when the incentive design … lacks RPE features, the incentive portfolio vega motivates CEOs to increase total risk through the systematic component … because it can be hedged. In contrast, when the incentive design includes RPE features, CEOs prefer idiosyncratic risk because …

Purpose – The purpose of this study is to investigate the association between corporate risk and the interaction … corporate risk only exists in the sphere of overconfident CEOs and 2) that the positive association between overconfident CEOs … and corporate risk only exists in the sphere of high CEO incentive compensation. The authors show that the combination of …

We provide evidence that CEO equity incentives, especially stock options, influence stock liquidity risk via … disclosure policy. Contributing to the literature on CEO risk-taking, we document a positive association between CEO options and … future systematic stock liquidity risk. Controlling for endogeneity, we show that information disclosure quality is an …

Influenced by their compensation plans, CEOs make their own luck through decisions that affect future firm risk. After … adopting a relative performance evaluation (RPE) plan, total and idiosyncratic risk are higher, and the correlation between …) plans. Plans including accounting-based performance metrics and/or cash payouts have weaker risk-related incentives. The …

, and firm risk. The first essay demonstrates that manager sentiment, a managerial trait proxy for managerial optimism, can … exhibit lower stock price crash risk and the third essay finds that relative performance evaluation increases long …