Labor Unemployment Risk and CEO Incentive Compensation

Published Online:https://doi.org/10.1287/mnsc.2023.4714

References

  • Acharya VV, Baghai RP, Subramanian KV (2014) Wrongful discharge laws and innovation. Rev. Financial Stud. 27(1):301–346.CrossrefGoogle Scholar
  • Adams RB, Licht AN, Sagiv L (2011) Shareholders and stakeholders: How do directors decide? Strategic Management J. 32(12):1331–1355.CrossrefGoogle Scholar
  • Agrawal AK, Matsa DA (2013) Labor unemployment risk and corporate financing decisions. J. Financial Econom. 108(2):449–470.CrossrefGoogle Scholar
  • Amihud Y, Lev B (1981) Risk reduction as a managerial motive for conglomerate mergers. Bell J. Econom. 12(2):605–617.CrossrefGoogle Scholar
  • Armstrong CS, Larcker DF, Ormazabal G, Taylor DJ (2013) The relation between equity incentives and misreporting: The role of risk-taking incentives. J. Financial Econom. 109(2):327–350.CrossrefGoogle Scholar
  • Autor DH, Donohue JJ III, Schwab SJ (2006) The costs of wrongful-discharge laws. Rev. Econom. Statist. 88(2):211–231.CrossrefGoogle Scholar
  • Bae K-H, Kang J-K, Wang J (2011) Employee treatment and firm leverage: A test of the stakeholder theory of capital structure. J. Financial Econom. 100(1):130–153.CrossrefGoogle Scholar
  • Berk JB, Stanton R, Zechner J (2010) Human capital, bankruptcy, and capital structure. J. Finance 65(3):891–926.CrossrefGoogle Scholar
  • Bertrand M, Mullainathan S (2003) Enjoying the quiet life? Corporate governance and managerial preferences. J. Political Econom. 111(5):1043–1075.CrossrefGoogle Scholar
  • Borisov A, Ellul A, Sevilir M (2021) Access to public capital markets and employment growth. J. Financial Econom. 141(3):896–918.CrossrefGoogle Scholar
  • Cella C, Ellul A, Giannetti M (2013) Investors’ horizons and the amplification of market shocks. Rev. Financial Stud. 26(7):1607–1648.CrossrefGoogle Scholar
  • Cohen DA, Dey A, Lys TZ (2013) Corporate governance reform and executive incentives: Implications for investments and risk taking. Contempory Accounting Res. 30(4):1296–1332.CrossrefGoogle Scholar
  • Coles JL, Daniel ND, Naveen L (2006) Managerial incentives and risk-taking. J. Financial Econom. 79(2):431–468.CrossrefGoogle Scholar
  • Coles JL, Li Z, Wang AY (2018) Industry tournament incentives. Rev. Financial Stud. 31(4):1418–1459.CrossrefGoogle Scholar
  • Colla P, Ippolito F, Li K (2013) Debt specialization. J. Finance 68(5):2117–2141.CrossrefGoogle Scholar
  • Core J, Guay W (2002) Estimating the value of employee stock option portfolios and their sensitivities to price and volatility. J. Accounting Res. 40(3):613–630.CrossrefGoogle Scholar
  • De Angelis D, Grullon G, Michenaud S (2017) The effects of short-selling threats on incentive contracts: Evidence from an experiment. Rev. Financial Stud. 30(5):1627–1659.CrossrefGoogle Scholar
  • Fedaseyeu V, Linck JS, Wagner HF (2018) Do qualifications matter? New evidence on board functions and director compensation. J. Corporate Finance 48:816–839.CrossrefGoogle Scholar
  • Ferrell A, Liang H, Renneboog L (2016) Socially responsible firms. J. Financial Econom. 122(3):585–606.CrossrefGoogle Scholar
  • Garcia D, Norli Ø (2012) Geographic dispersion and stock returns. J. Financial Econom. 106(3):547–565.CrossrefGoogle Scholar
  • Gormley TA, Matsa DA (2016) Playing it safe? Managerial preferences, risk, and agency conflicts. J. Financial Econom. 122(3):431–455.CrossrefGoogle Scholar
  • Gormley TA, Matsa DA, Milbourn T (2013) CEO compensation and corporate risk: Evidence from a natural experiment. J. Accounting Econom. 56(2):79–101.CrossrefGoogle Scholar
  • Graham JR, Li S, Qiu J (2012) Managerial attributes and executive compensation. Rev. Financial Stud. 25(1):144–186.CrossrefGoogle Scholar
  • Guay WR (1999) The sensitivity of CEO wealth to equity risk: An analysis of the magnitude and determinants. J. Financial Econom. 53(1):43–71.CrossrefGoogle Scholar
  • Guthrie K, Sokolowsky J, Wan KM (2012) CEO compensation and board structure revisited. J. Finance 67(3):1149–1168.CrossrefGoogle Scholar
  • Hall B, Murphy K (2002) Stock options for undiversified executives. J. Accounting Econom. 33:3–42.CrossrefGoogle Scholar
  • Hayes RM, Lemmon M, Qiu M (2012) Stock options and managerial incentives for risk taking: Evidence from FAS 123R. J. Financial Econom. 105(1):174–190.CrossrefGoogle Scholar
  • Heider F, Ljungqvist A (2015) As certain as debt and taxes: Estimating the tax sensitivity of leverage from state tax changes. J. Financial Econom. 118(3):684–712.CrossrefGoogle Scholar
  • Heron RA, Lie E (2017) Do stock options overcome managerial risk aversion? Evidence from exercises of executive stock options. Management Sci. 63(9):3057–3071.LinkGoogle Scholar
  • Hsu JW, Matsa DA, Melzer BT (2018) Unemployment insurance as a housing market stabilizer. Amer. Econom. Rev. 108(1):49–81.CrossrefGoogle Scholar
  • Huang A, Hui KW, Li RZ (2019) Federal judge ideology: A new measure of ex ante litigation risk. J. Accounting Res. 57(2):431–489.CrossrefGoogle Scholar
  • Jayaratne J, Strahan PE (1996) The finance-growth nexus: Evidence from bank branch deregulation. Quart. J. Econom. 111(3):639–670.CrossrefGoogle Scholar
  • Jayaratne J, Strahan PE (1998) Entry restrictions, industry evolution, and dynamic efficiency: Evidence from commercial banking. J. Law Econom. 41(1):239–274.CrossrefGoogle Scholar
  • Jensen MC, Meckling WH (1976) Theory of the firm: Managerial behavior, agency costs and ownership structure. J. Financial Econom. 3(4):305–360.CrossrefGoogle Scholar
  • Knopf JD, Nam J, Thornton JH Jr (2002) The volatility and price sensitivities of managerial stock option portfolios and corporate hedging. J. Finance 57(2):801–813.CrossrefGoogle Scholar
  • Lambert R, Larcker D (2001) Options, restricted stock, and incentives. Working paper, University of Pennsylvania, Philadelphia.Google Scholar
  • Ljungqvist A, Zhang L, Zuo L (2017) Sharing risk with the government: How taxes affect corporate risk taking. J. Accounting Res. 55(3):669–707.CrossrefGoogle Scholar
  • Low A (2009) Managerial risk-taking behavior and equity-based compensation. J. Financial Econom. 92(3):470–490.CrossrefGoogle Scholar
  • Matsa DA, Miller AR (2013) A female style in corporate leadership? Evidence from quotas. Amer. Econom. J. Appl. Econom. 5(3):136–169.CrossrefGoogle Scholar
  • Meyer BD (1990) Unemployment insurance and unemployment spells. Econometrica 58(4):757–782.CrossrefGoogle Scholar
  • Meyer BD (1995) Lessons from the US unemployment insurance experiments. J. Econom. Literature 33(1):91–131.Google Scholar
  • Parham R (2017) Knowledge constraints and firm growth. Working paper, University of Virginia, Charlottesville, VA.Google Scholar
  • Petersen MA (2009) Estimating standard errors in finance panel data sets: Comparing approaches. Rev. Financial Stud. 22(1):435–480.CrossrefGoogle Scholar
  • Rajgopal S, Shevlin T (2002) Empirical evidence on the relation between stock option compensation and risk taking. J. Accounting Econom. 33(2):145–171.CrossrefGoogle Scholar
  • Smith CW, Stulz RM (1985) The determinants of firms’ hedging policies. J. Financial Quant. Anal. 20(04):391–405.CrossrefGoogle Scholar
  • Smith CW Jr, Watts RL (1992) The investment opportunity set and corporate financing, dividend, and compensation policies. J. Financial Econom. 32(3):263–292.CrossrefGoogle Scholar
  • Starks LT, Venkat P, Zhu Q (2020) Corporate ESG profiles and investor horizons. Working paper, University of Texas at Austin, Austin, TX.Google Scholar
  • Titman S (1984) The effect of capital structure on a firm’s liquidation decision. J. Financial Econom. 13(1):137–151.CrossrefGoogle Scholar
  • Topel RH (1984) Equilibrium earnings, turnover, and unemployment: New evidence. J. Labor Econom. 2(4):500–522.CrossrefGoogle Scholar
  • White H (1980) A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica 48(4):817–838.CrossrefGoogle Scholar
  • Zingales L (2000) In search of new foundations. J. Finance 55(4):1623–1653.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.