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Value-Risk Tradeoffs and Managerial Incentives

Tsui, David - 2018

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 …

Persistent link: https://www.econbiz.de/10012936802

How do the Labor Market Values of Managerial Traits Evolve?

Li, Si - 2018

significant time variation that co-moves with the stock market. Such pay premium is concentrated among top talented managers, with …

Persistent link: https://www.econbiz.de/10012937551

Changes in CEO Stock Option Grants : A Look at the Numbers

Athanasakou, Vasiliki E. - 2018

We study changes in the number of CEO stock option grants. Motivated by evidence of rigidity in stock option grants, we first provide a detailed description of the main aggregate trends in CEO stock option grants. We then consider the cross-sectional heterogeneity in option-granting activity and...

Persistent link: https://www.econbiz.de/10012938487

Seeking Alpha : Excess Risk Taking and Competition for Managerial Talent

Acharya, Viral V. - 2018

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 …

Persistent link: https://www.econbiz.de/10012940502

Golden Parachutes and the Wealth of Shareholders

Bebchuk, Lucian A. - 2018

Golden parachutes have attracted much debate and substantial attention from investors and public officials for more than two decades, and the Dodd-Frank Act mandated a shareholder vote on any future adoption of a golden parachute by public firms. We analyze the relationship that golden...

Persistent link: https://www.econbiz.de/10012940555

Locked-In : The Effect of CEOs' Capital Gains Taxes on Corporate Risk-Taking

Yost, Benjamin - 2017

I study the effects of CEOs' unrealized capital gains tax liabilities (tax burdens) on corporate risk-taking. Recent work suggests that high tax burdens discourage CEOs from selling stock. I hypothesize that this causes the executives to become overexposed to firm-specific risk, thereby reducing...

Persistent link: https://www.econbiz.de/10012945194

Executive Stock Options and Systemic Risk

Armstrong, Chris - 2020

We examine whether features of bank executives' compensation contracts cause them to take actions that contribute to systemic risk. Using multiple return-based measures of systemic risk coupled with an identification strategy that exploits heteroskedasticity to account for endogenous matching of...

Persistent link: https://www.econbiz.de/10012823513

Performance-Based Vesting Compensation and Debt Contracting

King, Tao-Hsien Dolly - 2019

This paper examines whether the risk-taking incentives induced by performance-based vesting (p-v) compensation influence bank loan contracting and credit ratings. Consistent with our risk-shifting hypothesis, we find that the p-v based compensation, as measured by the proportion of grant date...

Persistent link: https://www.econbiz.de/10012865414

CEO Compensation and Risk of Turnover : Evidence from CEO Divorce

Mohseni, Mahdi - 2019

Contrary to the entrenchment view of executive compensation, I find that CEOs with more control over the firm, proxied by higher equity ownership, have smaller compensation packages and are less likely to have severance contracts. Despite lower pay, these CEOs have longer tenure and their...

Persistent link: https://www.econbiz.de/10012866567

Managerial Incentives Explanation of Equity Carve-Outs Initial Returns

Seistrajkova, Biljana - 2017

This paper studies the first day return of 227 carve-outs during 1996-2013. I find that the first day return of newly issued subsidiary stocks is explained by the reporting distortions in the pre IPO period, conditioned on whether the executives and directors of the subsidiary received stock...

Persistent link: https://www.econbiz.de/10012970504