Executive Overconfidence and Compensation Structure

We examine the impact of overconfidence on compensation structure. We test alternative hypotheses, drawing upon and extending existing theories. Our findings support the exploitation hypothesis: firms offer incentive-heavy compensation contracts to overconfident CEOs to exploit their positively-biased views of firm prospects. Overconfident CEOs receive more option-intensive compensation and this relation increases with CEO bargaining power. Exogenous shocks (SOX and FAS 123R) provide additional support for the findings. Overconfident non-CEO executives also receive more incentive-based pay, independent of CEO overconfidence, buttressing the notion that firms tailor compensation contracts to individual behavioral traits such as overconfidence

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Year of publication:	2016
Authors:	Humphery-Jenner, Mark
Other Persons:	Lisic, Ling Lei (contributor) ; Nanda, Vikram (contributor) ; Silveri, Sabatino (contributor)
Publisher:	[2016]: [S.l.] : SSRN
Subject:	Führungskräfte \| Managers \| Vergütungssystem \| Compensation system \| Managervergütung \| Executive compensation

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Extent:	1 Online-Ressource (61 p)
Type of publication:	Book / Working Paper
Language:	English
Notes:	In: Journal of Financial Economics (JFE), Vol. 119, Issue 3, pp.533-558, 2016 Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 1, 2015 erstellt
Other identifiers:	10.2139/ssrn.2416431 [DOI]
Classification:	J33 - Compensation Packages; Payment Methods ; M52 - Compensation and Compensation Methods and Their Effects (stock options, fringe benefits, incentives, family support programs)
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10013006590