Managerial Risk-Taking Behavior and Equity-Based Compensation

Angie Low
Additional contact information
Angie Low: Ohio State U and Nanyang Technological U

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: I study managers' risk-taking behavior and how it is affected by equity-based compensation. I find that in response to an exogenous increase in takeover protection in Delaware during the mid-1990s, managers lower firm risk by 5%. I also find that the decrease in firm risk is concentrated among firms with low managerial equity-based incentives. In particular, firms with low CEO portfolio sensitivity to stock return volatility experience more than 10% reduction in risk. Further, firms respond to the increased protection accorded by the regime shift with greater incentives for risk-taking.

JEL-codes: G32 (search for similar items in EconPapers)
Date: 2006-09
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.cob.ohio-state.edu/fin/dice/papers/2006/2006-20.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.cob.ohio-state.edu/fin/dice/papers/2006/2006-20.pdf [301 Moved Permanently]--> https://www.cob.ohio-state.edu/fin/dice/papers/2006/2006-20.pdf [301 Moved Permanently]--> https://fisher.osu.edu/fin/dice/papers/2006/2006-20.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2006-20

Access Statistics for this paper

More papers in Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().