Download or read book CEO Compensation and Corporate Risk Taking Evidence from US Listed firms written by 劉鎮順 and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Executive Compensation and Business Policy Choices at U S Commercial Banks written by Robert DeYoung and published by DIANE Publishing. This book was released on 2010-08 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether and how the terms of CEO compensation contracts at large commercial banks between 1994 and 2006 influenced, or were influenced by, the risky business policy decisions made by these firms. The authors find strong evidence that bank CEOs responded to contractual risk-taking incentives by taking more risk; bank boards altered CEO compensation to encourage executives to exploit new growth opportunities; and bank boards set CEO incentives in a manner designed to moderate excessive risk-taking. These relationships are strongest during the second half of the author¿s sample, after deregulation and technological change had expanded banks' capacities for risk-taking. Charts and tables.
Download or read book CEO Compensation and Corporate Risk written by Todd A. Gormley and published by . This book was released on 2014 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the two-way relationship between managerial compensation and corporate risk by exploiting an unanticipated change in firms' business risks. The natural experiment provides an opportunity to examine two classic questions related to incentives and risk -- how boards adjust incentives in response to firms' risk and how these incentives affect managers' risk-taking. We find that, after left-tail risk increases, boards reduce managers' exposure to stock price movements and that less convexity from options-based pay leads to greater risk-reducing activities. Specifically, managers with less convex payoffs tend to cut leverage and R&D, stockpile cash, and engage in more diversifying acquisitions.
Download or read book Incentives and Risk Taking written by Jyotirmoy Podder and published by . This book was released on 2013 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the relation of incentives and risk taking for 104 listed U.S. insurance companies over 2006-2010. Our results show that independent director compensation is positively related to risk taking as are CEO compensation and institutional ownership. Besides dollar value and proportion of stock based compensation, we document similar results with total compensation. In terms of institutions, dedicated institutional ownership rather than total institutional ownership is found positively related to risk taking. These findings suggest that the stock based compensation of independent directors and the CEO help provide the right incentives to align their interests with the shareholders when dedicated institutional owners serve as external monitors. Our results are robust to several methods, different risk taking measures and a wide range of control variables.
Download or read book CEO Compensation and Risk Taking at Financial Firms written by Amar Gande and published by . This book was released on 2017 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine whether risk-taking among the largest financial firms in the U.S. is related to CEO equity incentives before the 2008 financial crisis. Using data on U.S. Federal Reserve emergency loans provided to these firms, we find that the amount of emergency loans and total days the loans are outstanding are increasing in pre-crisis CEO risk-taking incentives - “vega.” Our results are robust to accounting for endogeneity in CEO equity incentives and selection of financial firms into emergency loan programs. We also rule out the possibility that our results are driven by a bank's funding base, bank complexity, CEO overconfidence, or matching of CEOs to select banks. We conclude that equity incentives (vega) embedded in CEO compensation contracts were positively associated with risk-taking in financial firms which resulted in potential solvency problems. We also find some evidence, although somewhat weaker, that higher incentive alignment (“delta”) mitigated such problems in those financial firms.
Download or read book Executive Compensation and Business Policy Choices at U S Commercial Banks written by Robert DeYoung and published by . This book was released on 2015 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether and how the terms of CEO compensation contracts at large commercial banks between 1994 and 2006 influenced, or were influenced by, the risky business policy decisions made by these firms. We find strong evidence that bank CEOs responded to contractual risktaking incentives by taking more risk; systematic evidence that bank boards altered CEO compensation to encourage executives to exploit new growth opportunities; and more limited evidence that bank boards set CEO incentives in a manner designed to moderate excessive risk-taking. These relationships are strongest during the second half of our sample, after deregulation and technological change had expanded banks' capacities for risk-taking, and for the largest banking companies, which are better strategically positioned to exploit these opportunities.
Download or read book Employment Data Under the New Standard Industrial Classification written by United States. Bureau of Labor Statistics and published by . This book was released on 1989 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book High Return High Risk Does Stock Option Based CEO Compensation Encourage Risk Taking written by Harry Xia and published by . This book was released on 2015 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study, through empirical evidence of 3,081 US firms during the period of 1992-2009, shows a strong causal relation between different CEO compensation components and firms' investment policy and firm risk. Specifically, the proportion of CEO option-based compensation is positively and significantly associated with firm's R&D expenditures and firm focus, while the proportion of cash-based and restricted stock compensation are negatively and significantly related. Such results are robust across alternative measures and statistical methodology. Furthermore, there is a non-linear relation between CEO option pay level and R&D investment discovered with practical implications. Finally, following the implementation of FAS 123R in 2005, new evidence indicates that option-based compensation remains as an effective motivation and even becomes a more efficient incentive for CEO to take risk on R&D investment and firm focus.
Download or read book Executive Compensation and Shareholder Value written by Jennifer Carpenter and published by Springer Science & Business Media. This book was released on 2013-04-17 with total page 159 pages. Available in PDF, EPUB and Kindle. Book excerpt: Executive compensation has gained widespread public attention in recent years, with the pay of top U.S. executives reaching unprecedented levels compared either with past levels, with the remuneration of top executives in other countries, or with the wages and salaries of typical employees. The extraordinary levels of executive compensation have been achieved at a time when U.S. public companies have realized substantial gains in stock market value. Many have cited this as evidence that U.S. executive compensation works well, rewarding managers who make difficult decisions that lead to higher shareholder values, while others have argued that the overly generous salaries and benefits bear little relation to company performance. Recent conceptual and empirical research permits for the first time a truly rigorous debate on these and related issues, which is the subject of this volume.
Download or read book Managerial Risk Taking and CEO Excess Compensation written by Rahat Jafri and published by . This book was released on 2014 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines risk taking and CEO excess compensation problems in U.S firms to determine their impact on shareholders wealth. Literature suggests a positive effect of CEO incentive risk and strong corporate governance on CEO risk taking. Furthermore, the strong governance mitigates excess compensation problem. Controlling for governance quality and incentive risk, we provide empirical evidence of a significant association between risk taking and CEO excess compensation. When we also control for pay-performance sensitivity (delta) and feedback effects of incentive compensation on CEO risk taking, we find that higher use of incentive pay encourages risk taking, and due to a high exposure to risk CEOs draws excess compensation. Furthermore, we find that the excess compensation problem is more serious with CEOs taking high risk than with those taking low risk. Finally, we find that CEO risk taking also has structural impacts on CEO compensation.
Download or read book The Handbook of the Economics of Corporate Governance written by Benjamin Hermalin and published by Elsevier. This book was released on 2017-09-18 with total page 762 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Handbook of the Economics of Corporate Governance, Volume One, covers all issues important to economists. It is organized around fundamental principles, whereas multidisciplinary books on corporate governance often concentrate on specific topics. Specific topics include Relevant Theory and Methods, Organizational Economic Models as They Pertain to Governance, Managerial Career Concerns, Assessment & Monitoring, and Signal Jamming, The Institutions and Practice of Governance, The Law and Economics of Governance, Takeovers, Buyouts, and the Market for Control, Executive Compensation, Dominant Shareholders, and more. Providing excellent overviews and summaries of extant research, this book presents advanced students in graduate programs with details and perspectives that other books overlook. - Concentrates on underlying principles that change little, even as the empirical literature moves on - Helps readers see corporate governance systems as interrelated or even intertwined external (country-level) and internal (firm-level) forces - Reviews the methodological tools of the field (theory and empirical), the most relevant models, and the field's substantive findings, all of which help point the way forward
Download or read book Managerial Risk Taking and CEO Excess Compensation written by Syed Rahat Ali Jafri and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Compensation Duration and Risk Taking written by Igor Salitskiy and published by . This book was released on 2015 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Short-termism'' of executives has recently attracted a lot of public attention. This paper develops a novel measure of CEO compensation duration and studies how it affects corporate risk taking. This measure is constructed using grant-level data of CEO compensation and reflects vesting schedules for stock grants and expiration dates for option grants. I use grants awarded many years before the measurement period as an exogenous component of compensation duration. The results show that longer pay duration is associated with higher firm risk, measured by stock return volatility, idiosyncratic stock return volatility, and analyst forecast dispersion. Additional tests show that higher risk is not associated with higher level of investment or with higher financial leverage. At the same time, higher pay duration increases the amount of equity financing and reduces earnings manipulation.
Download or read book Essays on Corporate Risk Management written by Jiyeon Yun and published by . This book was released on 2019 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: In my dissertation, I examine corporate risk management behavior of U.S. insurers. In my first essay, I investigate the effects of executive compensation on corporate risk management. Because risk averse managers may underinvest and reduce risk beyond what is optimal for investors, I examine whether firms can encourage managerial risk taking through compensation that leads managers to hedge less. Our unique dataset allows us to build the comprehensive and clean measure of corporate hedging behavior. Utilizing the implementation of FAS 123R, paper finds that CEO compensation has a causal effect on their firms' overall hedging. In addition, paper provides strong evidence that CEO compensation has a causal effect on firms' insurance demand but only weak evidence on derivative usage. In my second essay, I investigate whether Enterprise Risk Management (ERM) creates value by allowing firms to take more strategic business risk and greater advantage of opportunities in their core business. Firms that engage in ERM should be able to better understand the aggregate risk inherent in different business activities. With an increased understanding in a firm's risk profile, ERM adopting firms should take a more strategic approach to risk management and expand risk-taking in areas where they do have a comparative advantage. We find that ERM adopting firms are increasing its share of core risk. We also find that life insurers have significantly higher share of core risk. ERM firms are increasing its share of core risk not through the risk substitution with non-core risk but by increasing its non-core risk. This provides evidence that ERM firms are recognizing interactions among sources of risks and the benefits of natural hedges.
Download or read book CEO Compensation Compensation Risk and Corporate Governance written by Zhimin (Jimmy) Yu and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book CEO COMPENSATION OVERCONFIDENCE and CORPORATE INNOVATION EVIDENCE FROM U S LISTED FIRMS written by 尤安馬 and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Pay Without Performance written by Lucian A. Bebchuk and published by Harvard University Press. This book was released on 2004 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance.
