Institutional Investors, Managerial Incentives, and Firms' Risk Profiles

Simple item page
dc.contributorJohnson, Shane A
dc.contributorGallmeyer, Michael
dc.creatorCelil, Hursit S
dc.date.accessioned2015-05-01T05:57:08Z
dc.date.accessioned2017-04-07T20:04:07Z
dc.date.available2015-05-01T05:57:08Z
dc.date.available2017-04-07T20:04:07Z
dc.date.created2013-05
dc.date.issued2013-04-11
dc.description.abstractIn this dissertation, I study the influence of monitoring by institutional investors on corporate behavior within the context of CEO compensation-based incentives. I find that institutional investors provide an executive with higher levels of compensation sensitivity with respect to a firm?s equity price (Delta). In contrast to prior literature, however, once I control the dynamic nature of the data, institutional investors do not affect compensation sensitivity with respect to a firm?s equity risk (Vega). Instead, I find that institutional investors appear to influence the risk profile of firm through the firm?s investment, financing and diversification policy choices even after I control for the CEO?s compensation structure. The results suggest that compensation-related incentives to increase risk (i.e. vega) and monitoring by institutional investors are substitutes of each other in that both can offset the managerial incentives to reduce risk that stem from greater levels of compensation delta. These results are robust to potential endogeneity problems that may arise due to the dynamic nature of panel data.
dc.identifier.urihttp://hdl.handle.net/1969.1/149301
dc.language.isoen
dc.subjectPrincipal Agent Models
dc.subjectCorporate Governance
dc.subjectInstitutional Investors
dc.subjectManagerial Incentives
dc.subjectCompensation Structure
dc.subjectPolicy Choices
dc.titleInstitutional Investors, Managerial Incentives, and Firms' Risk Profiles
dc.typeThesis

Files

Collections

Texas A&M University at College Station