Abstract
ABSTRACT Firm's long term corporate performance and its corporate governance are strongly associated. Executive compensation and its structure greatly influence corporate decisions. This study finds significant relationship between CEO's compensation structure and the firm's propensity to invest in riskier projects such as capital expenditure, advertisements, and research and development. Results is this paper suggest that more non-cash component, consisting mostly of stock awards and stock options, leads the management to undertake such risky projects. The author argues that such projects improve the outlook of the firm and increases firm's risk at the same time; thereby, increasing the value of the stocks owned by the CEO and options granted to the CEO. Keywords Corporate Governance, Management Compensation
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
