CEO Pay Gap and Bank Risk-taking

Bank executives’ substantial compensation is seen as one of the factors that contributed to the risk-taking that led to the 2008–2009 financial crisis. We test whether and how pay disparities between CEO and non-CEO executives—the so-called CEO pay gap—influences risk-taking at publicly traded commercial banks in the U.S. We find strong evidence that larger CEO pay gaps are associated with lower risk levels, improved financial performance, and greater information transparency. Our findings are unique to banks and are consistent with the CEO power proposition. We corroborate this proposition by linking larger pay gaps to increased CEO power and low CEO turnover-performance sensitivity. Our results imply that placing absolute limits on bank CEO pay would likely result in increased bank risk-taking.

Bank CEO materialism: Risk controls, culture and tail risk

We examine the extent to which bank CEOs exert influence on the corporate cultures of banking organizations by investigating how the prevalence of materialistic bank CEOs has evolved over time, and how observed risk management policies, the behavior of non-CEO executives and bank tail risk vary with bank CEO materialism. We document that between 1994 and 2004 the proportion of U.S. banks run by materialistic CEOs increased significantly in absolute terms and relative to non-financial firms, coinciding with significant bank deregulation. Using an index reflecting the strength of risk management functions (RMI), we find that RMI is significantly lower for banks with materialistic CEOs, significantly increases after a non-materialistic CEO replaces a materialistic CEO, and decreases after a materialistic CEO succeeds a non-materialistic one. We also provide evidence consistent with non-CEO executives in banks with materialistic CEOs more aggressively exploiting inside trading opportunities around government intervention during the financial crisis. Finally, we find that banks with materialistic CEOs have significantly more downside tail risk relative to banks with non-materialistic CEOs, where the difference between groups increased significantly during the recent crisis.

Executive search firms play a major role in the hiring decisions of executives, yet their impact on executive pay and firms' internal labor markets remain unexplored. In this paper, we present a model that attempts to fill this gap. The model relates the escalation of CEO pay to a decline in firms' internal labor markets and less competition for the CEO position within the firm. The latter, in turn, is the result of more efficient executive search firm activity, and, in the presence of such activity, to an increase in the importance of as opposed to firm-specific managerial skills. The model implies that CEO pay, the pay gap between the CEO and non-CEO executives, the variance of pay, and the importance of outside to inside successions for CEO positions, will increase together as search activity becomes more efficient or general skills become more important. The time-series implications of the model are consistent with U.S. evidence.

Purpose Currently, the theoretical and empirical understanding of how founder chief executive officers (CEOs) influence foreign subsidiary ownership decisions is underdeveloped. This study aims to address this gap in research by examining the combined impact of founder CEOs and non-CEO executives on ownership decisions regarding foreign subsidiaries. Design/methodology/approach This study draws on upper echelons theory and relevant psychological literature to develop a conceptual framework to assess the joint influence of founder CEOs and non-CEO executives on firms' foreign subsidiary ownership. Accordingly, this study takes Chinese listed companies as samples and uses a Tobit model to empirically test the relevant theoretical hypotheses. Findings First, this study finds that founder status leads to a higher level of risk-taking and overconfidence among CEOs, which in turn leads to a preference for higher levels of foreign subsidiary ownership. Second, the results reveal that demographic similarity, tenure overlap and power disparity between founder CEOs and non-CEO executives enhance the positive influence of founder CEOs on firms' foreign subsidiary ownership. Originality/value This study contributes to the literature on foreign subsidiary ownership by exploring the micro-foundations of ownership decisions and focusing on the role of founder CEOs, an area underexplored in prior research. Furthermore, by analysing the combined effect of CEOs and non-CEO executives on firms' foreign subsidiary ownership, this study advances upper echelons theory and contributes to the growing body of literature on the dynamics between CEOs and top management teams in strategic decision-making.

Impact of sexual trajectories of men who have sex with men on the reduction in HIV transmission by pre-exposure prophylaxis

Objective To investigate the clinical value of percentage of pulmonary perfusion defect score ( PPDs％ ) for risk stratification and prognosis evaluation in patients with acute pulmonary embolism (APE).Methods A retrospective study was carried out on PPDs％ data of patients( n =21 ) with confirmed APE from January 2001 to December 2008.The patients were divided into three levels,low( n =10),medial( n =7) and high risk groups( n =4),according to 2008 ESC APE diagnosis and treatment guidelines.The reference index in predicting risk stratification by PPDs％ was ascertained.34 patients with confirmed APE were divided into three levels ( mild,moderate and severe risk levels) according to the standard of PPDS％ diagnosis from January 2009 to June 2011.A prospective study on the incidence rate of the clinical adverse events was performed.Results The PPDs％ of low,medial and high risk levels according to 2008 ESC guidelines were (25.94 ± 3.95 ) ％,(45.63 ± 4.38 ) ％ and ( 58.42 ± 4.96 ) ％ respectively,with a significant difference ( t ≥4.755,P ＜ 0.01 ).The standard of PPDS％ diagnosis for risk stratification was confirmed in APE:low risk levels:PPDs％ ＜ 30％,moderate:30％ ≤ PPDs％ ＜50％,and high:PPDs％ ≥50％.The mild,moderate and severe risk patients with APE were 17cases,11cases and 6cases respectively,according to the standard of PPDs％ diagnosis,or 15cases,13cases and 6cases respectiveldy,according to the standard of 2008 ESC guidelines.The uniform rate was 94.11％ for two methods; the uniform rate was 100.00％ in which high risk of APE.The mild,moderate and severe risk patients with APE according to the standard of PPDs％ standard with clinical adverse events for were 1case (5.89％ ),3cases (27.27％ ) and 4cases (66.67％ ) respectively,with a significant difference ( x2 =9.23,P ＜0.01 ).Conclusions PPDs％ could be used as an important reference index for risk stratification of diagnosis,selecting therapeutic programs,evaluating therapeutic efficiency and predicting the prognosis in patients with APE. Key words: Pulmonary embolism ; Pulmonary artery; Perfusion; Risk assessment; Prognosis

In recent years, with the rapid development of digital technology, the digital transformation of banks has been widely mentioned. As the main direction of the future development of commercial banks, the success of the digital transformation of banks is directly related to the future development of banks and the level of bank risk. China's bank digital transformation has a certain scale at present, in-depth analysis of the deficiencies in the digital transformation of banks, from which measures to promote the digital transformation of banks can be proposed, which is very beneficial to the development of China's banks themselves, thus helping to promote China's economic development. Based on the data of commercial banks from 2012 to 2021, the findings of this paper show that: (1) the digital transformation of banks has an inverted U-shaped impact on the risk-taking of banks, which first rises and then falls; (2) the digital transformation of banks does not have a significant impact on the risk-taking of state-owned banks, i.e., the digital transformation of banks plays a role in reducing the risk-taking of state-owned banks (3) digital transformation of banks has an inverted U-shaped impact on non-state-owned banks' risk-taking, with an increase followed by a decrease.

With the rapid growth of new technologies such as big data, digital technology is increasingly permeating our daily lives. Financial institutions, particularly commercial banks, are also seizing opportunities in the wave of digital financial development to provide better financial services. However, this development in digital finance has affected the credit structure and risk-taking of banks. This study aims to empirically analyze the impact of digital finance development on the credit structure and risk-taking of commercial banks. Additionally, the study seeks to discuss how the combined effects of digital finance and credit structure influence bank risk-taking. Empirical analysis is conducted using financial data from commercial banks over the past decade. The analytical methods include collecting secondary data, statistical data processing, and regression analysis to evaluate the relationships between digital finance development, credit structure, and bank risk-taking. The empirical analysis results show that the development of digital finance has promoted an increase in the scale of bank credit and the ratio of personal loans to credit loans. Integrating digital finance with banks has proven to reduce the risk burden banks bear. Furthermore, as digital finance continues to develop, adjustments in the bank's credit structure also affect the risk burden borne by the banks. Based on these findings, it is recommended that commercial banks continue to adopt digital financial technologies to increase their credit scale and optimize their credit structure. Additionally, banks should consider developing policies that support integrating digital technologies to reduce risk burdens and enhance financial stability. Further research is also suggested to explore the long-term impact of digital finance on the overall financial performance and risk of banks

Against the backdrop of the increasingly salient constraints of resource scarcity and environmental pressures on global economic development, sustainable innovation emerges as an imperative strategic pathway for corporations to secure a competitive edge in the international marketplace. Corporate innovation capability serves as the critical factor for both the advancement of sustainable innovation and the maintenance of the corporate competitive edge. While the extant literature has extensively explored how internal and external governance mechanism forces shape corporate investment decision-making, the critical role of non-CEO executives in the process of corporate innovation investment decision-making remains conspicuously underexplored. This study examines the effect of bottom–up governance mechanisms within executive teams on corporate innovation investment from the perspective of non-CEO executive independence. We used a sample of A-listed companies on the Shanghai and Shenzhen stock exchanges from 2007 to 2021 for empirical tests. We found a U-shaped relation between non-CEO executive independence and corporate innovation investment, and this finding still held after addressing endogeneity issues and conducting a series of robustness tests. Mechanism analysis revealed that both non-CEO executives’ decision horizon and firm agency costs positively moderate this U-shaped relationship. This U-shaped effect is pronounced in firms with lower CEO power, lower levels of corporate governance, and non-state-owned firms. Our findings provide an important basis for clarifying the internal governance mechanism of the executive teams while offering new insights for optimizing the allocation of corporate resources and promoting corporate innovation from the perspective of improving corporate governance.

Purpose This study aims to investigate the impact of funding liquidity on bank risk-taking, in the context of developing countries. While high liquidity (low liquidity risk) as measured by ratio of total deposits to total assets may improve bank stability, other strand of literature shows that low liquidity risk may increase bank risk-taking (as measured by Z-score) and lowering bank stability. This study also aims to investigate the moderating influence of the COVID-19 crisis and bank size on the relationship between funding liquidity and bank risk-taking. Design/methodology/approach The authors collect annual bank-level data from 86 commercial banks in Indonesia from 2014 to 2021, comprising 686 bank-year observations, on return on assets (ROA), equity-to-assets ratio, ROA standard deviation (to calculate Z-score, a proxy for bank risk-taking), ratio of total deposits to total assets (as a proxy for liquidity risk), bank size, bank equity, ratio of operating expenses to income, asset growth, ratio of cash to total assets and COVID-19 period. The authors collect data on gross domestic product growth and inflation. The authors perform system generalized method of moments to investigate the effect of liquidity risk on bank risk-taking, incorporating control variables. Findings The authors find negative impacts of funding liquidity on the Z-score. Lower liquidity risk tends to increase moral hazard and bank risk-taking. The authors also find that COVID-19 period increases the negative impact of liquidity on bank risk-taking. Thus, banks engage in higher bank risk-taking in COVID-19 period than in non-COVID-19 period. Bank size lower the negative impact of liquidity on bank risk-taking. Thus, larger banks tend to engage in less bank risk-taking than small banks when they face high liquidity (lower liquidity risk). Research limitations/implications The results support the notion that liquidity risk has a negative impact on bank risk-taking, thus confirming a potential seed for bank instability. The COVID-19 period, which is characterized by liquidity abundance, tends to increase bank risk-taking when the banks face low liquidity risks. Size tends to lower bank risk-taking in the context of liquidity risk. Small sample size becomes the limitation of this study. Practical implications Bank regulatory oversight is imperative all times. Even in a seemingly low-risk situation (high liquidity funding), bank stability may be threatened. The COVID-19 period, which is characterized by liquidity abundance, tends to increase bank risk-taking in the context of liquidity risk. Regulators should monitor small banks more closely because small banks tend to exhibit higher risk-taking in the context of liquidity risk. Originality/value The authors investigate the impact of liquidity risk on bank risk-taking, taking COVID-19 period and size as moderating variables. COVID-19 period is characterized by abundant liquidity. However, banks tend to restrict their activities because the risks increase during crisis period.

This paper conducts the first empirical assessment of the theories concerning the influence of ownership structure on bank risk-taking in the presence of regulations in Pakistan. The sample used in this paper comprises a panel data of 26 banks in Pakistan, for the period from 2000 to 2014. The analysis provides evidence that increase in ownership concentration leads to an increase in bank risk-taking. Managerial ownership is associated with high risk-taking at low and high levels of managerial ownership while at intermediate level, managerial ownership has negative impact on bank risk-taking. Different types of ownership of banks in Pakistan have different impact on risk-taking. While government, family and institutional ownership have a positive impact on bank risk-taking, foreign ownership has a negative impact on bank risk-taking. Furthermore, the results show that capital regulations are important in influencing bank risk-taking with regard to higher ownership concentration. The findings of this paper suggest that the relation between bank risk-taking and capital regulations typically depends on the type of ownership.

The objective of this paper is to offer an approach to assess the risk associated with Municipal Solid Wastes, in a geospatial context. Initially, a risk index including hazard, vulnerability and other important variables was built. The built model is based on multi-criteria evaluation techniques and geographic information systems. Subsequently, the constructed index was used to model possible damage in various municipalities of the state of Chiapas, Mexico. The results indicate that the highest levels of risk are found in places with unfavorable conditions, such as high rates of waste generation, low waste collection coverage, steep slopes, etc. that cover 6.22% of the study area. The areas with high risk level are mainly found in the southeast of the municipalities of Villa Corzo and Villaflores, and cover 27.06% of the study area. The places of low and very low risk levels are concentrated in the center and northeast of the study area, in the municipalities of Suchiapa, Chiapa de Corzo and Acala, and cover 38.6% of the area. At the municipal level, Berriozábal, Villaflores and Villa Corzo have the highest levels of risk in most of their territory; the high levels of risk presented in Berriozábal are due to the limited territorial area that it occupies in the study area. In Villaflores and Villa Corzo, the high levels of risk are due to the high population dispersion. A large part of Tuxtla Gutiérrez territory presents low and medium risk levels, especially within the population settlement. The peripheral areas show the highest levels of risk, because the waste collection service is not provided very often. Finally, the Cohen's kappa statistic used to validate the precision of the model gave a value of 0.34, which means that the spatial model can be considered acceptable despite its low value. Although this work is only a general approach to spatial risk modeling at a regional scale, it provides interesting information. Moreover, it adds to the few efforts that exist in the literature to model the risk associated with wastes.

BackgroundScreening for inpatients at risk for long length of stay (LOS) is the first step of an effective hospital care plan for older inpatients. This study aims, in older adults admitted to a geriatric acute care ward, to examine and compare the 6-item brief geriatric assessment (BGA) and the “Programme de Recherche sur l’Intégration des Services pour le Maintien de l’Autonomie” (PRISMA-7) risk levels with long LOS, and to establish their performance criteria (i.e., sensitivity, specificity, positive predictive value, negative predictive value, likelihood ratios) for LOS.MethodsBased on an observational, retrospective, cohort design, 166 inpatients aged ≥75 admitted to a geriatric acute care ward of a McGill University-affiliated hospital (Montreal, Quebec, Canada) were recruited. The risk levels of the 6-item BGA (low, moderate and high) and the PRISMA-7 (low versus high) were calculated from a baseline assessment. The LOS was subsequently calculated in number of days.ResultsOnly the 6-item BGA high risk level was associated with a long LOS (Odds ratio = 1.1 with P = 0.028 and Hazard ratio = 2.1 with P = 0.004). Kaplan-Meier distributions showed that there was no significant difference in the delay of hospital discharge between the low and high-risk level reported by the PRISMA-7 (P = 0.381), whereas the 6-item BGA three risk levels differed significantly (P = 0.008), with individuals at high risk levels being discharged later when compared to those with low (P = 0.001) and moderate (P = 0.019) risk levels. Both tools’ performance criteria were poor (i.e., < 0.70), except for PRISMA-7’s sensitivity which was 100%.ConclusionThe 6-item BGA risk levels were associated with LOS, low risk-level being associated with short LOS and high-risk level with long LOS, but no association was reported with the PRISMA-7 risk levels. Both tools had poor performance criteria for long LOS, suggesting that they cannot be used as prognostic tools with current scientific knowledge.

This paper addresses the impacts of bank competition on the risk-taking behaviors of banks in Turkey over the period 2002-2012. After estimating H-statistic as a measure of competition and regressing this measure and other explanatory variables on the bank risk indicators, this paper concludes that competition has a negative impact on the financial fragility of Turkish banks, indicating that banks in a more competitive market tend to take lower level of risk. This finding supports the arguments of the “competition-stability” hypothesis in the Turkish banking system. Furthermore, bank concentration is found to be inversely related to bank risk. On the one hand, bank size, lending, liquidity, off-balance sheet activities are essential factors in explaining this relationship. On the other hand, a few instrumental variables are employed to reflect the country’s overall macroeconomic condition. In general, despite the negative impact of interest rate on bank risk-taking behavior in most of the models, in which different risk measures are used as dependent variables, the result highlights the empirical evidence of no significant association between economic growth and bank risk-taking. Overall, this paper aims to provide policy implications for bank management and consolidation policies and also the role of the Central Bank.