The financial crisis of 2008 focused increasing attention on corporate America and, in particular, the risk … decisions, JP Morgan shareholders benefited from this risk-taking. Accordingly, shareholders were poorly positioned to address … the incentives that drove risky operational decisions. So-called “improved corporate governance” in the form of …

firm risk, even in the presence of strong risk taking incentives. Our results are robust to controls for the sensitivity of … CEO wealth to stock price changes, firm risk determinants, the endogenous feedback effects of firm risk on CEO incentives …We investigate the risk choices of risk averse CEOs. Following recent theoretical work, we expect CEO risk aversion to …

failure risk. The effectiveness of CEO pay is strengthened among well-governed firms, whereas tournament incentives are … interquartile change in the distribution of CEO pay translates in a reduction of the failure risk probability by approximately 21 …%. The Pay Gap between the CEO and its subordinate executives (tournament incentives) also plays a major role in lowering IPO …

This paper solves the dynamic investment problem of a risk averse agent compensated with a performance related bonus … principal experiences financial stress. Thus weaker financial corporations explain the downwards trend in risk-taking after the … 2008 financial crisis. Strong and weak banks also stand apart: managers from weak banks took more risk than their peers in …

risk to managers and encouraging risk-substitution; that is, managers with relatively undiversified personal portfolios … tend to pass up profitable projects with high idiosyncratic (firm-specific) risk in favor of less-profitable projects that … have greater aggregate (market) risk. Using parametric and semi-parametric estimation methods, we examine how managerial …

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 …

I investigate the consequences of executive stock option (ESO) risk incentives on risk-taking and future stock returns … exists in executives’ risk preferences and hence, the efficacy of ESO risk incentives to encourage risk-taking. I provide … evidence that for firms with poor recent performance, high vega generates incentives for executives to take risk …

risk on agency costs. We find decreased firm value, especially for firms with lower levels of investor protection and with … the highest expected agency costs. We also find that managerial incentives are reduced as measured by lower CEO pay … subsequent to the change. Our findings emphasize that officer and director litigation risk is an important governance mechanism …

disclosure of the regulation indicates that the most suggestive mechanism is shareholders’ sentiment of managerial agency risk …