Executive Compensation & Companies’ Soft and Hard Investment

DOI

10.2991/aebmr.k.200908.008How to use a DOI?

Keywords

executive compensation, managerial decision, risk taking behavior, corporate strategy

Abstract

Executive Compensation is a critical issue today, since executives’ decisions, motivated by compensation incentives, critically affect firms’ value and stakeholders’ interest. Consistent with prior literature, we have documented a positive (negative) relationship between Vega (Delta) from executive option holding and firm’s R&D spending, which is a proxy for risk-taking. This paper incrementally documents that Vega will not only incentivize R&D, but also it will increase firm’s capital expenditure on a relative weaker scale, because investment with more tangibility will be less risky. Moreover, the results denoted that top management team’s (excluding CEO) compensation incentives contribute to the corporate decision in the same manner as CEO’s incentive does. Lastly, the results for post-2006 period are qualitatively the same as pre-2006 period.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Dongxu Yang
AU  - Shizhong Xiong
AU  - Tian Tan
PY  - 2020
DA  - 2020/09/08
TI  - Executive Compensation & Companies’ Soft and Hard Investment
BT  - Proceedings of the 3rd International Conference on Economy, Management and Entrepreneurship (ICOEME 2020)
PB  - Atlantis Press
SP  - 48
EP  - 53
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200908.008
DO  - 10.2991/aebmr.k.200908.008
ID  - Yang2020
ER  -