Terrorist attacks, CEO overconfidence, and CEO compensation

Yunji Hwang and Seung Hun Han

Finance Research Letters, 2022, vol. 46, issue PA

Abstract: This study examines how terrorist attacks and CEO confidence levels impact CEO compensation structures. Terrorist attacks in the United States from 1999 to 2018 are examined as negative exogenous shocks affecting CEO compensation. The findings indicate that overconfident CEOs of affected firms are likely to receive higher equity compensation than overconfident CEOs of firms located far from attacks, while non-overconfident CEOs of affected firms receive higher cash compensation than CEOs located far from attacks. This study contributes to the literature by examining how CEO compensation levels and structures vary according to nonfinancial shocks and CEO confidence levels.

Keywords: CEO compensation; CEO overconfidence; Exogenous shocks; Terrorist attacks (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321003160

DOI: 10.1016/j.frl.2021.102275

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