Executive compensation, risk taking and the state of the economy

被引：16
|
作者：
Raviv, Alon [1 ]
Sisli-Ciamarra, Elif [2 ]
机构：
[1] Bar Ilan Univ, Sch Business, IL-52900 Ramat Gan, Israel
[2] Brandeis Int Business Sch, Waltham, MA 02478 USA
来源：
JOURNAL OF FINANCIAL STABILITY | 2013年 / 9卷 / 01期
关键词：
Executive compensation; Risk taking; Regulation; Equity based compensation; Economic crisis; DEPOSIT INSURANCE; OPTION COMPENSATION; JOB DISPLACEMENT; AGENCY PROBLEMS; CORPORATE-DEBT; INCENTIVES; VALUATION;
D O I：
10.1016/j.jfs.2012.12.003
中图分类号：
F8 [财政、金融];
学科分类号：
0202 ;
摘要：
In this paper we present a model of executive compensation to analyze the link between incentive compensation and risk taking. Our model takes into account the loss in the value of an executive's expected wealth from employment if the firm becomes insolvent during a bad state of the economy. We illustrate that a given compensation package may lead to different levels of asset risk under different economic states. More specifically, we show that the positive relationship between equity-based compensation and risk taking may weaken and possibly disappear during systemic financial crises. An important policy implication from our analysis is that similar regulations may have different effects on risk taking depending on the state of the economy. (C) 2012 Elsevier B.V. All rights reserved.
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页码：55 / 68
页数：14
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