Stock Options and Managerial Incentives for Risk-Taking: Evidence from FAS 123R

By Rachel M. Hayes, Mike Lemmon, Mingming Qiu. 2012

486 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/bb02d48428b680b1d0d9d6db44241db5dc6f992a

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Omesh Kini
2. John M. Bizjak
3. Swaminathan L. Kalpathy
4. Ryan Williams

In Strategy and Management

1. Omesh Kini
2. John M. Bizjak

Citations in the corpus

• Corporate Social Responsibility and CEO Risk-Taking Incentives (2016, unknown): “…the literature to have influence on Vega: 1) TENURE, defined as the length of time that the CEO has been at his or her position (Coles et al., 2006; Hayes et al., 2012); 2) INSTHOLD, defined Electronic copy available at: https://ssrn.com/abstract=2828267 15 as the percentage of institutional share…”
• Tournament Incentives, Firm Risk, and Corporate Policies (2012, result): “In this respect, our results are consistent with Hayes, Lemmon, and Qiu (2010) who do not find any evidence that the decline in stock option usage due to the adoption of FAS 123R resulted in less risky firm policies.”
• CEO Compensation and Corporate Risk: Evidence from a Natural Experiment (2013, unknown): “Other recent work attempts to overcome the challenge by analyzing firms' risk-taking following new accounting rules that reduced options pay (Chava and Purnanandam, 2010; Hayes et al., 2012).”
• Performance-vesting provisions in executive compensation (2018, background): “Under the assumption that risk-taking incentives come primarily from options, Hayes, Lemmon, and Qiu (2012) interpret their results as offering little support for the view that the convexity in option-based compensation implements risk-taking by executives on behalf of shareholders.”
• The causal effect of option pay on corporate risk management (2016, unknown): “In contrast, Hayes, Lemmon, and Qiu (2012) find no relation between a FAS 123R-induced reduction in vega and changes in five proxies of corporate risk-taking: R&D expenditure, capital expenditure, leverage, cash holdings and firm risk.”
• Managerial Risk-Taking Incentive and Firm Innovation: Evidence from FAS 123R (2018, unknown): “Following Hayes et al. (2012), we compute the change in innovation as the within-firm difference between the average ln(1+PAT) (or the average ln(1+CITE)) or the average RD_ASSETS during pre-FAS 123R (2002–2004) and post-FAS 123R (2006–2008) periods.”
• Executive Compensation: A Survey of Theory and Evidence (2017, unknown): “Likely causes of the positive correlation with percentage ownership include the positive e¤ect of returns on option deltas, which mechanically increases e¤ective percentage ownership, and high returns indicating more valuable e¤ort, in turn increasing the optimal level of incentives (see the model o”
• Executive Overconfidence and Compensation Structure (2015, unknown): “We follow Hayes et al. (2012) to define fiscal year 2005 as the start of the post-FAS 123R period.”