Managerial risk aversion and the structure of executive compensation
Identifikátory výsledku
Kód výsledku v IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F23%3A10454469" target="_blank" >RIV/00216208:11230/23:10454469 - isvavai.cz</a>
Výsledek na webu
<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=YxGlbLrQwS" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=YxGlbLrQwS</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1111/corg.12480" target="_blank" >10.1111/corg.12480</a>
Alternativní jazyky
Jazyk výsledku
angličtina
Název v původním jazyce
Managerial risk aversion and the structure of executive compensation
Popis výsledku v původním jazyce
Research question/issue We examine how chief executive officers' (CEOs) innate risk aversion influences the size and structure of their compensation contracts. In so doing, we estimate managerial risk aversion based on the Big Five personality traits-openness, conscientiousness, extraversion, agreeableness, and neuroticism-inferred using IBM's Personality Insights service. Research findings/insights We provide evidence that executives' inherent risk aversion is related to their compensation structure. Contrary to agency theory predictions, we find that more risk-averse CEOs receive more cash-based and less equity-based compensation but receive lower total compensation. This relationship is moderated by differences in firms' resource advantages. Theoretical/academic implications Despite the theoretical prediction that managerial risk aversion is a key factor determining the structure of executives' compensation contracts, there is limited empirical evidence on whether firms adjust the components of compensation based on CEOs' risk preferences. Our results help us better understand the interplay between CEO personality and executive compensation. Practitioner/policy implications This study offers important implications for organizations in that knowledge about executives' inherent risk aversion is important and relevant for designing effective compensation contracts.
Název v anglickém jazyce
Managerial risk aversion and the structure of executive compensation
Popis výsledku anglicky
Research question/issue We examine how chief executive officers' (CEOs) innate risk aversion influences the size and structure of their compensation contracts. In so doing, we estimate managerial risk aversion based on the Big Five personality traits-openness, conscientiousness, extraversion, agreeableness, and neuroticism-inferred using IBM's Personality Insights service. Research findings/insights We provide evidence that executives' inherent risk aversion is related to their compensation structure. Contrary to agency theory predictions, we find that more risk-averse CEOs receive more cash-based and less equity-based compensation but receive lower total compensation. This relationship is moderated by differences in firms' resource advantages. Theoretical/academic implications Despite the theoretical prediction that managerial risk aversion is a key factor determining the structure of executives' compensation contracts, there is limited empirical evidence on whether firms adjust the components of compensation based on CEOs' risk preferences. Our results help us better understand the interplay between CEO personality and executive compensation. Practitioner/policy implications This study offers important implications for organizations in that knowledge about executives' inherent risk aversion is important and relevant for designing effective compensation contracts.
Klasifikace
Druh
J<sub>imp</sub> - Článek v periodiku v databázi Web of Science
CEP obor
—
OECD FORD obor
50201 - Economic Theory
Návaznosti výsledku
Projekt
<a href="/cs/project/GA21-09231S" target="_blank" >GA21-09231S: Meta-analýzy výnosů strategií správy finančních investic</a><br>
Návaznosti
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)
Ostatní
Rok uplatnění
2023
Kód důvěrnosti údajů
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Údaje specifické pro druh výsledku
Název periodika
Corporate Governance: an International Review
ISSN
0964-8410
e-ISSN
1467-8683
Svazek periodika
31
Číslo periodika v rámci svazku
4
Stát vydavatele periodika
GB - Spojené království Velké Británie a Severního Irska
Počet stran výsledku
19
Strana od-do
563-581
Kód UT WoS článku
000829278300001
EID výsledku v databázi Scopus
2-s2.0-85134561161