Image of A Dual Agency View of Board Compensation: The Joint Effects of Outside Director and CEO Stock Options on Firm Risk

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A Dual Agency View of Board Compensation: The Joint Effects of Outside Director and CEO Stock Options on Firm Risk

This paper contributes to multiple agency theory by examining how the compensation schemes awarded to outside directors and the CEO jointly affect firm-level risk taking. Using data of the S&P 1500 firms from 1997 to 2006, we find support for earlier arguments that providing the CEO, the outside directors, or both with stock options increases risk taking. More importantly, we find that compensating outside directors with stock options has significantly stronger effects than CEO stock options. Finally, contrary to what one would expect, we find that these effects are mutually substituting; that is, if both the outside directors and the CEO are provided with stock option compensation, outside directors' incentives weaken the effect of the CEO's incentives on firms' risk taking.

Ketersediaan

Call NumberLocationAvailable
PSB lt.dasar - Pascasarjana1
Penerbit USA Strategic Management Society.,
Edisi Vol. 32 No. 2, Feb 2011
Subjek Compensation
Risk taking
Governance
Outside directors
Multiple agency theory
ISBN/ISSN 0143-2095
Klasifikasi NONE
Deskripsi Fisik 228 p.
Info Detail Spesifik Strategic Management Society
Other Version/Related Tidak tersedia versi lain
Lampiran Berkas Tidak Ada Data