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 …

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 …

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 …

. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their …Incentive compensation induces correlation between the portfolio of managers and the cash flow of the firms they manage … the risk in his compensation. In particular, shareholders can monitor the manager's portfolio stochastically, and since …