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| Tekijä: | Low, A. |
| Otsikko: | Managerial risk-taking behavior and equity-based compensation |
| Lehti: | Journal of Financial Economics
2009 : JUN, VOL 92:3, p. 470-490 |
| Asiasana: | compensation managers equity capital risk behaviour |
| Kieli: | eng |
| Tiivistelmä: | The purpose of the paper is to present evidence on how equity-based compensation affects managers' risk-taking behavior and hence the shareholder wealth. The article utilizes the shift in Delaware takeover regime that increased takeover protection during mid-1990's. Managers lowered firm risk by 6 % in response to the increased protection. The risk reduction was more common in firms with low managerial equity compensation. The companies responded to the regime shift by increasing managerial incentives for risk-taking. The paper also finds evidence that risk reduction destroys shareholder value. |
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