risk faced by agents. It is thus important to understand how superiors use this discretion and the organizational factors … that when superiors are confronted by inequality in agents' performance risk (i.e., uncertainty as to how effort translates … performance risk. However, superiors are often charged with decisions, including initial resource allocations, which affect or …

Using a sample of 3,688 mergers and acquisitions over the period of 1992 to 2005, we find that post-merger equity risk … declines roughly 18% in the year after the announcement. We find that post-merger equity risk is negatively related to the … sensitivity of CEO wealth to stock return volatility (vega). The negative relation between vega and equity risk over the post …

clarifying the relationship between risk and incentive pay and how managers optimally bundle incentive pay and the delegation of … principal-agent model to explain the lack of consistent empirical support for a tradeoff between risk and incentives. Using data … from the 1998 British WERS, the authors investigate whether there is: 1) evidence of a risk-incentives tradeoff as …

I investigate the consequences of executive stock option (ESO) risk incentives on risk-taking and future stock returns … “vega,” the sensitivity of CEO wealth to stock return volatility), and risk-taking. However, significant heterogeneity … exists in executives’ risk preferences and hence, the efficacy of ESO risk incentives to encourage risk-taking. I provide …

The relationship between risk and incentives in franchise contracting is still an unsolved issue in the literature …. According to the standard principal-agent model, a trade-off emerges between the franchisee's protection against risk and … incentive motivation. Contrary to this traditional view, we argue that the relationship between risk and incentives can be …