The Effect of Overconfidence on the Sensitivity of CEO Wealth to Equity Risk

被引：12
|
作者：
Niu, Jijun [1 ]
机构：
[1] Simon Fraser Univ, Fac Business Adm, Burnaby, BC V5A 1S6, Canada
来源：
JOURNAL OF FINANCIAL SERVICES RESEARCH | 2010年 / 38卷 / 01期
关键词：
Overconfidence; CEO compensation; Risk taking; Bank; CAPITAL STRUCTURE DECISIONS; INVESTMENT OPPORTUNITY SET; STOCK OPTION PORTFOLIOS; MANAGEMENT COMPENSATION; OWNERSHIP STRUCTURE; BANKING; VOLATILITY; DIVERSIFICATION; DEREGULATION; DIVIDEND;
D O I：
10.1007/s10693-010-0081-8
中图分类号：
F8 [财政、金融];
学科分类号：
0202 ;
摘要：
Recent theory predicts that shareholders provide overconfident managers with weaker risk-taking incentives. We test this prediction using a sample of bank CEOs over the period 1993-2002. We classify a CEO as overconfident if he is more often characterized as confident than as cautious in press. Consistent with theory, we find that the sensitivity of CEO wealth to equity risk is lower for overconfident CEOs. Our finding suggests that shareholders know whether a CEO is overconfident, and take that into account when designing the compensation contract for the CEO.
引用
收藏
页码：23 / 39
页数：17
相关论文
共 50 条
  • [1] The Effect of Overconfidence on the Sensitivity of CEO Wealth to Equity Risk
    Jijun Niu
    Journal of Financial Services Research, 2010, 38 : 23 - 39
  • [2] The sensitivity of CEO wealth to equity risk: an analysis of the magnitude and determinants
    Guay, WR
    JOURNAL OF FINANCIAL ECONOMICS, 1999, 53 (01) : 43 - 71
  • [3] The effect of CEO overconfidence on bank risk taking
    Niu, Jijun
    ECONOMICS BULLETIN, 2010, 30 (04): : 3288 - 3299
  • [4] CEO OVERCONFIDENCE, EQUITY INCENTIVES AND COST STICKINESS
    Xu, Juanjuan
    Lin, Hui
    TRANSFORMATIONS IN BUSINESS & ECONOMICS, 2022, 21 (3C): : 470 - 486
  • [5] Too risky to hold? The effect of downside risk, accumulated equity wealth, and firm performance on CEO equity reduction
    Matta, Elie
    McGuire, Jean
    ORGANIZATION SCIENCE, 2008, 19 (04) : 567 - 580
  • [6] Joint effect of CEO overconfidence and corporate social responsibility discretion on cost of equity capital
    Tseng, Chih-Yang
    Demirkan, Sebahattin
    JOURNAL OF CONTEMPORARY ACCOUNTING & ECONOMICS, 2021, 17 (01)
  • [7] CEO Overconfidence and Corporate Risk and Performance
    Kharabsheh, Buthiena
    Al-Qudah, Sura
    MONTENEGRIN JOURNAL OF ECONOMICS, 2024, 20 (03) : 99 - 111
  • [8] Bank systemic risk and CEO overconfidence
    Lee, Jin-Ping
    Lin, Edward M. H.
    Lin, James Juichia
    Zhao, Yang
    NORTH AMERICAN JOURNAL OF ECONOMICS AND FINANCE, 2020, 54
  • [9] CEO overconfidence and bondholder wealth effects: Evidence from mergers and acquisitions
    Chen, Sheng-Syan
    Ho, Keng-Yu
    Ho, Po-Hsin
    Nie, Wei-Ying
    JOURNAL OF CORPORATE FINANCE, 2022, 77
  • [10] CEO equity risk bearing and strategic risk taking: The moderating effect of CEO personality
    Benischke, Mirko H.
    Martin, Geoffrey P.
    Glaser, Lotte
    STRATEGIC MANAGEMENT JOURNAL, 2019, 40 (01) : 153 - 177
12345