The effect of managerial bonus plans on corporate derivatives usage

Autor:	Jouahn Nam, John H. Thornton, Young Sang Kim
Rok vydání:	2008
Předmět:	Economics and Econometrics Executive compensation business.industry media_common.quotation_subject Sample (statistics) Payment Microeconomics Firm risk Incentive Order (exchange) Payoff function business Finance Risk management media_common
Zdroj:	Journal of Multinational Financial Management. 18:229-243
ISSN:	1042-444X
DOI:	10.1016/j.mulfin.2007.10.001
Popis:	This paper examines the effect of risk management incentives resulting from managerial bonus plans on firms’ derivatives usage. Partitioning the sample into firms whose managers are more likely to face convexity or concavity in the bonus payoff function, we find a negative relation between bonus plans and derivatives usage for firms in the convex region and a positive relation for firms in the concave region. These results provide evidence that the incentives inherent in managerial bonus plans cause managers to increase or decrease firm risk in order to maximize their expected bonus payments.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::260051e447358c12a7a28fa971ecd566 https://doi.org/10.1016/j.mulfin.2007.10.001 Zobrazit plný text záznamu Full Text from ScienceDirect