In this study we analyze how CEO risk incentives affect the efficiency of research and development (R&D) investments … may induce managers to overinvest in inefficient R&D projects and therefore hurt firm performance …

Influenced by their compensation plans, CEOs make their own luck through decisions that affect future firm risk. After … adopting a relative performance evaluation (RPE) plan, total and idiosyncratic risk are higher, and the correlation between …) plans. Plans including accounting-based performance metrics and/or cash payouts have weaker risk-related incentives. The …