Employment risk, compensation incentives, and managerial risk taking: Evidence from the mutual fund industry

• 成果类型: Article; Proceedings Paper
• 署名作者: Kempf, Alexander; Ruenzi, Stefan; Thiele, Tanja
• 署名单位: University of Texas System; University of Texas Austin; University of Cologne; University of Cologne
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2008.05.001
• 发表日期: 2009
• 页码: 92-108
• 关键词: Managerial risk taking; Employment risk; Compensation incentives; Mutual funds; restrictions

摘要

We examine the influence on managerial risk taking of incentives due to employment risk and due to compensation. Our empirical investigation of the risk taking behavior of mutual fund managers indicates that managerial risk taking crucially depends on the relative importance of these incentives. When employment risk is more important than compensation incentives, fund managers with a poor midyear performance tend to decrease risk relative to leading managers to prevent potential job loss. When employment risk is low, compensation incentives become more relevant and fund managers with a poor midyear performance increase risk to catch up with the midyear winners. (C) 2008 Elsevier B.V. All rights reserved.