We examine whether executive stock options can induce excessive risk taking by managers in firms' security issue decisions. We find that CEOs whose wealth is more sensitive to stock return volatility due to their option holdings are more likely to choose debt over equity as a capital-raising...

We examine the relation between accounting conservatism and inside debt held by managers in the form of pension benefits and deferred compensation. We find that financial reporting is less conservative in firms whose CEOs hold more inside debt, particularly in firms with high default risk and...

Are firms' financial disclosure decisions affected by executive compensation at other firms? We find that a CEO's pay gap relative to the highest CEO pay among industry peers, defined as industry tournament incentives, can lead to distortions in corporate financial disclosures. Our analyses show...

We investigate the impact of workers' exposure to unemployment risk on CEO incentive compensation. Exploiting state-level changes in unemployment benefits as a source of variation in workers' unemployment costs, we find that after unemployment insurance benefits become more generous boards...