The sensitivity of stock options' payoff to return volatility, or vega, provides risk-averse CEOs with an incentive to … prediction, we find that vega gives CEOs incentives to increase their firms' total risk by increasing systematic risk but not … idiosyncratic risk. Collectively, our results suggest that stock options might not always encourage managers to pursue projects that …

We examine whether executive stock options can induce excessive risk taking by managers in firms' security issue … decisions. We find that CEOs whose wealth is more sensitive to stock return volatility due to their option holdings are more … with executive stock options aligning the interests of managers and shareholders; rather, it supports the hypothesis that …

shortcomings: it drives managers to engage in manipulative practices, and it generates excessive risk taking. Some scholars …-crisis occurred. We show here that managers compensated in stock options and similar devices face a tradeoff between these two … undesirable courses of action-manipulation and excessive risk taking-both of which generate benefits for managers at the expense …

increase in new options granted leads to a 2.8–4.2 percent increase in equity volatility. This increase in risk is driven …

increase in new options granted leads to a 2.8-4.2 percent increase in equity volatility. This increase in risk is driven …