Due to the separation between ownership and management and, in the absence of at least a single major shareholder, executives of publicly traded companies have almost complete power and discretion in management to pursue projects that benefit themselves personally but which may not optimize shareholder interest (Berle and Means, 1932).The focus of this paper is on the structure of chief executive officer (CEO) and chief financial officer (CFO) compensation packages of publicly traded financial1 companies in the United States, their effect on excessive firm risk taking, and the perceived role of Board directors in mitigating this risk as a good governance obligation. The addition of CFO’s in this analysis reflects the findings in Chava and Purnanandam (2010) and Jiang, Petroni and Wang (2010) that incentives of CFO’s could be more influential in
MSc Fin Project - Simon Fraser University
Copyright is held by the author(s).
You are free to copy, distribute and transmit this work under the following conditions: You must give attribution to the work (but not in any way that suggests that the author endorses you or your use of the work); You may not use this work for commercial purposes.
Member of collection