We examine the relation between managers' personal income tax rates and their corporate investment decisions. Using … plausibly exogenous variation in federal and state tax rates, we find a positive relation between managers' personal tax rates … managers' tax rates — we do not find similar relations for middle-income tax rates. We also find that the tax-induced risk …

managers' incentive compensation packages. I find that shareholder value increases with risk and therefore managerial risk … aversion creates potential agency conflicts between managers and shareholders. I also find that firms provide managers with … idiosyncratic (rather than systematic) risk and managers are more risk-averse. Collectively, these results suggest that firms …

We present a model where firms compete for scarce managerial talent ("alpha") and managers are risk-averse. When … managers cannot move across firms after being hired, employers learn about their talent, allocate them efficiently to projects … and provide insurance to low-quality managers. When instead managers can move across firms, firm-level coinsurance is no …