Ex ante CEO severance pay and risk-taking in the financial services sector

被引：12

作者：

Brown, Kareen ^{[1
]}

Jha, Ranjini ^{[2
]}

Pacharn, Parunchana ^{[1
]}

机构：

[1] Brock Univ, St Catharines, ON L2S 3A1, Canada

[2] Univ Waterloo, Sch Accounting & Finance, Waterloo, ON N2L 3G1, Canada

来源：

JOURNAL OF BANKING & FINANCE | 2015年 / 59卷

关键词：

Managerial compensation; Severance pay; Excessive risk-taking; EXECUTIVE-COMPENSATION; BANK RISK; INCENTIVES; CONTRACTS;

D O I：

10.1016/j.jbankfin.2015.04.027

中图分类号：

F8 [财政、金融];

学科分类号：

0202 ;

摘要：

We examine 533 CEO severance contracts for financial services firms from 1997 to 2007 and find that ex ante severance pay is positively associated with risk-taking after controlling for the incentive effects provided by equity-based compensation. We report a positive causal relation between the amount of severance pay and risk-taldng using popular market-based risk measures as well as the distance-to-default and the Z-score. We also find that severance pay encourages excessive risk-taking using metrics such as tail risk and asset quality. Our results are consistent with the risk-shifting argument and provide support for recent reforms on severance pay in the financial sector. (C) 2015 Elsevier B.V. All rights reserved.

引用

页码：111 / 126

页数：16

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