taxes on risk taking and managerial compensation. In contrast to existing literature, we assume financial institutions to be … equilibrium where they collectively incentivize higher risk-taking. A bonus tax can prevent this market failure, even if it is … implemented unilaterally: proper bonus taxation reduces risk-taking of the taxed bank and, consequentially, rules out the …

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 …

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 …

We study the motive of using equity-based pay in executive compensation: the risk-sharing motive versus the performance … find equity-based pay decreases in SPI, which is consistent with the risk-sharing motive but inconsistent with the …

“rainmakers”) to take the excessive risk and employ the excessive leverage in the bubble that created the preconditions for the … properties that induce reckless risk-taking. Since boom-period bonuses do not have to be returned if rainmaker decisions …

decreasing firm risk. The mechanisms that transmit incentives to decisions and decisions to risk appear to be more conservative … positively related to the actual and predicted reduction in firm risk. The reduction in firm risk, arising from adoption of a …

compensation risk …

I model the joint effects of debt, macroeconomic conditions, and cash flow cyclicality on risk-shifting behavior and … managerial pay-for-performance sensitivity. I show that risk-shifting incentives rise during recessions and that the shareholders …