We investigate how CEO's risk incentive (vega) affects firm innovation. To establish causality, we exploit compensation changes instigated by the FAS 123R accounting regulation in 2005 that mandated stock option expensing at fair values. Our identification tests indicate a positive and causal...

Incentives theory suggests that compensation schemes should be analyzed along two dimensions: controllability and congruence. Most schemes cannot satisfy both criteria at once. EVA bonus schemes, a major managerial innovation of the 90's, favor the congruence criterion. This paper questions ist...

We establish that CEOs of companies experiencing volatile industry conditions are more likely to be dismissed. At the same time, industry risk is, accounting for various other factors, unlikely to be associated with CEO compensation other than through dismissal risk. Using this identification...

Systemic management of a local government unit lacks viewing the LGU as an economic entity which should actively use modern financial knowledge in its activity in order to stimulate active construction of an economic and social potential. It needs to stimulate processes of building in local...

There are robust gender differences in the domains of risk taking, overconfidence and competition behavior. However, as expertise tends to level these differences, we ask whether financial experts still show gender dissimilarities in their domains of decision making? We analyze survey responses...

Company executives rely on new product development teams to carry out their directives and make decisions according to management’s goals and objectives. However, new product team members bring their own motivational perspectives to strategic decisions. This research examines how individual...

The paper studies how a person's concern for a future career may influence his or her incentives to put in effort or make decisions on the job. In the model, the person's productive abilities are revealed over time through observations of performance. There are no explicit output contingent...

A manager's compensation contract and the level of resources available to him jointly influence his incentives to acquire information about different investment alternatives as well as his resource allocate decisions. We show that the optimal compensation contract induces investment allocations...

I examine how stock-based compensation for CEOs is designed following corporate acquisitions conditional on the economic nature of acquisitions. Large conglomerate acquisitions are the type of events that represent significant changes in the economic environment of the company. Therefore, it is...