Abstract
ABSTRACT We undertake a broad-based study of the effect of the equity incentives of Chief Executive Officers (CEOs) and Chief Financial Officers (CFOs) on decisions relating to corporate policies and find that the risk-taking incentives of acquirer CEOs have a greater impact on the probability that firms conduct an acquisition than CFOs, extending the argument that higher risk-taking incentives induce CEOs to undertake more investments. Higher risk-decreasing incentives are associated with greater probability of firms conducting repurchases and seasoned equity issues (SEOs). Specifically, compared with CEOs, the risk-taking incentives of CFOs induce greater probability that firms conduct repurchases and SEOs.
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