How do auditors perceive CEO's risk-taking incentives?

Fargher, Neil; Jiang, Li Wei (Alicia); Yu, Yangxin

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How do auditors perceive CEO's risk-taking incentives?

Date

2013

Authors

Fargher, Neil

Jiang, Li Wei (Alicia)

Yu, Yangxin

Publisher

Blackwell Publishing Ltd

Abstract

Prior literature documents that executive compensation influences managerial risk preferences through executives' portfolio sensitivities to changes in stock prices (delta) and stock-return volatility (vega). Large deltas discourage managerial risk-taking