loss for the optimal contracts unless the utility functions of both the principal and the agent exhibit linear risk …

Based on a simple prior, this note derives upper bounds for the coefficient of absolute & relative risk aversion if …

ambiguity model accommodates both ambiguity (uncertainty) and risk. For an incomplete, competitive asset market, we develop a … preferences to identify the ambiguity and risk indices as well as the ambiguity probability measure. We do not require ambiguity …

effect of risk-taking incentives on both the magnitude and composition of firm risk. We find that when the incentive design … lacks RPE features, the incentive portfolio vega motivates CEOs to increase total risk through the systematic component … because it can be hedged. In contrast, when the incentive design includes RPE features, CEOs prefer idiosyncratic risk because …

effect of risk-taking incentives on both the magnitude and composition of firm risk. We find that when the incentive design … lacks RPE features, the incentive portfolio vega motivates CEOs to increase total risk through the systematic component … because it can be hedged. In contrast, when the incentive design includes RPE features, CEOs prefer idiosyncratic risk because …

research suggesting that shareholders and proxy advisors fail to consider portfolio incentives when making Say-on-Pay decisions …. It then argues that when deciding how to vote in Say-on-Pay, shareholders should consider portfolio incentives, which … advise shareholders how to vote on various matters, including Say-on-Pay – should also consider portfolio incentives when …

In this paper, we study the risk taking implications of managerial pay-for-performance incentives (delta). The extant … of pay-for-performance incentives and firm risk strengthens as the relative contribution from option holdings increases … stock-based pay when designing compensation packages to provide appropriate performance and risk incentives to the …