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Risk-Taking Incentives and Returns on R&D Investment
Billings, Bruce K. - 2018
Traditional finance theory suggests that riskier investments should yield higher returns. Challenging this notion, anecdotal and empirical evidence suggests that highly-incented managers may take on excessive risk, leading to greater losses, while other theoretical research argues that high...
Persistent link: https://www.econbiz.de/10012924858
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Asymmetric Sensitivity of CEO Cash Compensation to Stock Returns
Leone, Andrew J.; Wu, Joanna S.; Zimmerman, Jerold L. - 2006
We document that CEO cash compensation is twice as sensitive to negative stock returns as it is to positive stock returns. Since stock returns include both unrealized gains and unrealized losses, we expect cash compensation to be less sensitive to stock returns when returns contain unrealized...
Persistent link: https://www.econbiz.de/10014029514
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The performance of hedge fund performance fees
Ben-David, Itzhak; Birru, Justin; Rossi, Andrea - 2020
adjusting for any risk). In the cross-section of funds, there is a substantial disconnect between lifetime performance and … incentive fees earned. These poor outcomes stem from the asymmetry of the performance contract, investors' return …
Persistent link: https://www.econbiz.de/10012244548
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rTSR : when do relative performance metrics capture relative performance?
Ma, Paul; Shin, Jee-Eun; Wang, Charles C. Y. - 2019
We develop a measurement-error framework for assessing the quality of relative-performance metrics designed to filter … out the systematic component of performance, and analyze relative total shareholder return (rTSR)-the predominant metric … market participants use to isolate managers' idiosyncratic performance-chosen by boards to evaluate managers. Among firms …
Persistent link: https://www.econbiz.de/10012064869
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The Role of Stock Returns in CEO Performance Evaluation : A New Interpretation
Jayaraman, Sudarshan; Ling, Xiaoxu; Wu, Joanna S.; … - 2021
the market. Further, the greater pay-for-performance sensitivity of information-event returns for CEO compensation is … illustrates the co-dependence between price-based and accounting-based measures for CEO performance evaluation, and presents a …
Persistent link: https://www.econbiz.de/10013250831
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Accelerated Vesting in Takeovers : The Impact on Shareholder Wealth
Elkinawy, Susan - 2011
We study the impact of accelerated vesting of equity awards on takeovers, whereby the restricted stock and/or stock options of the target CEO immediately vest and become unrestricted upon the close of the acquisition. We find that takeover premiums are significantly larger when the target CEO...
Persistent link: https://www.econbiz.de/10013117248
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Entrenchment or Incentive? CEO Employment Contracts and Acquisition Decisions
Zhao, Jing - 2013
performance, and undertake riskier deals than acquirers without a contract. Further investigation of individual contract …
Persistent link: https://www.econbiz.de/10013083291
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Do Managerial Behaviors Trigger Firm Exit? The Case of Hyperactive Bidders
Rahaman, Mohammad M. - 2019
This paper investigates the effects of managerial mergers and acquisitions related investment strategies on the exit risk of firms. Using a sample of hyperactive bidders, I show that managerial excessive acquisitiveness can precipitate firm exit. Overbidding is associated with weak corporate...
Persistent link: https://www.econbiz.de/10012905114
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CEO Pay Incentives and Risk-Taking : Evidence from Bank Acquisitions
Hagendorff, Jens - 2011
other stakeholders). Our results control for CEO pay-performance sensitivity and offer evidence consistent with a causal …
Persistent link: https://www.econbiz.de/10013133407
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Comparing Non-GAAP EPS in Earnings Announcements and Proxy Statements
Black, Dirk E. - 2020
We compare non-GAAP EPS in annual earnings announcements and proxy statements using hand-collected data from SEC filings. We find that proxies for capital market incentives (contracting incentives) are more highly associated with disclosure of non-GAAP EPS in annual earnings announcements (proxy...
Persistent link: https://www.econbiz.de/10012856894