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How Do Quasi-Random Option Grants Affect CEO Risk-Taking?

Shue, Kelly - 2019

We examine how an increase in stock option grants affects CEO risk-taking. The overall net effect of option grants is theoretically ambiguous for risk-averse CEOs. To overcome the endogeneity of option grants, we exploit institutional features of multi-year compensation plans, which generate two...

Persistent link: https://www.econbiz.de/10012902373

Efficient Bailouts?

Bianchi, Javier - 2012

We develop a quantitative equilibrium model of financial crises to assess the interaction between ex-post interventions in credit markets and the buildup of risk ex ante. During a systemic crisis, bailouts relax balance sheet constraints and mitigate the severity of the recession. Ex ante, the...

Persistent link: https://www.econbiz.de/10013096860

Deposit Insurance and the Composition of Bank Suspensions in Developing Economies : Lessons from the State Deposit Insurance Experiments of the 1920s

Chung, Ching-Yi - 2007

Reserve Board of Governors demonstrate that deposit insurance influenced the composition of bank suspensions in these states … each system, the bank failure rate rose to an unsustainable height and the system ceased operations …

Persistent link: https://www.econbiz.de/10012778253

Incentive Pay and Bank Risk-Taking : Evidence from Austrian, German, and Swiss Banks

Efing, Matthias; Hau, Harald; Kampkötter, Patrick; … - 2021

We use payroll data on 1.2 million bank employee years in the Austrian, German, and Swiss banking sector to identify … document an economically significant correlation of incentive pay with both the level and volatility of bank trading income … share in the capital markets divisions with the strength of incentive pay in unrelated bank divisions like retail banking …

Persistent link: https://www.econbiz.de/10013224886

Yesterday's Heroes : Compensation and Creative Risk-Taking

Cheng, Ing-Haw - 2013

We study the relationship between compensation and risk-taking among finance firms using a neglected insight from principal-agent contracting with hidden action and risk-averse agents. If the sensitivity of pay to stock price or slope does not vary with stock price volatility, then total...

Persistent link: https://www.econbiz.de/10013094549

Stock Option Exercise and Gift Exchange Relationships : Evidence for a Large Us Company

Cappelli, Peter - 2011

We investigate gift exchange relationships in real jobs, making use of a field quasi-experiment associated with the exercise of stock options for roughly 4500 managers in a large public company. In this company, option grants are set equally for all employees within occupational categories, and...

Persistent link: https://www.econbiz.de/10013129185

The Joint Cross Section of Stocks and Options

An, Byeong-Je - 2013

Stocks with large increases in call implied volatilities over the previous month tend to have high future returns while stocks with large increases in put implied volatilities over the previous month tend to have low future returns. Sorting stocks ranked into decile portfolios by past call...

Persistent link: https://www.econbiz.de/10013073570

The Response of Deferred Executive Compensation to Changes in Tax Rates

Gorry, Aspen - 2015

Given the increasing use of stock options in executive compensation, we examine how taxes influence the choice of compensation and document that income deferral is an important margin of adjustment in response to tax rate changes. To account for this option in the empirical analysis, we explore...

Persistent link: https://www.econbiz.de/10013015981

Options-Pricing Formula with Disaster Risk

Barro, Robert J. - 2016

A new options-pricing formula applies to far-out-of-the money put options on the overall stock market when disaster risk is the dominant force, the size distribution of disasters follows a power law, and the economy has a representative agent with Epstein-Zin utility. In the applicable region,...

Persistent link: https://www.econbiz.de/10013001208

The Corporate Profit Base, Tax Sheltering Activity, and the Changing Nature of Employee Compensation

Desai, Mihir A. - 2002

This paper examines the evolution of the corporate profit base and the relationship between book income and tax income for U.S. corporations over last two decades. The paper demonstrates that this relationship has broken down over the 1990s and has broken down in a manner that is consistent with...

Persistent link: https://www.econbiz.de/10012787259

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