This study examines three issues related to the sensitivity of bank CEO compensation to risk, or vega: (1) its relevance compared with CEO compensation vega in industrial firms; (2) its determinants; and (3) its effect on bank risk-taking. Using a sample of 156 U.S. bank holding companies (BHCs)...

This article examines the interrelations among five ownership and board characteristics in a sample of 260 banks and Savings-and-Loan Holding Companies (SLHCs). These governance characteristics, designed to reduce agency problems between shareholders and managers are insider ownership,...

Using an exhaustive sample of banks in the Gulf Cooperation Council region, in the years 2007 to 2009, this research examines the relative operating performance and risk-taking behavior of Islamic and non-Islamic banks during the global financial crisis and the role played by their corporate...

I test the market discipline of bank risk hypothesis by examining whether banks choose risk management policies that account for the risk preferences of subordinated debtholders. Using around 500,000 quarterly observations on the population of U.S. insured commercial banks over the 1995-2009...

I test the market discipline of bank risk hypothesis by examining whether banks choose risk management policies that account for the risk preferences of subordinated debt holders. Using around 500,000 quarterly observations on the population of U.S. insured commercial banks over the 1995-2009...

Theoretical literature (Jensen and Meckling, 1976 and Edmans and Liu, 2011) argues that inside debt – pension benefits and deferred compensation – has debt-like payoffs, and can therefore curb executives' excessive risk-taking incentives created by equity holdings. We test this theory in the...

Using a sample of publicly listed banks from 62 countries over the 1991-2017 period, we investigate the impact of capital on banks' cost of equity. Consistent with the theoretical prediction that more equity in the capital mix leads to a fall in firms' costs of equity, we find that better...