Throwing caution to the wind: The effect of CEO stock option pay on the incidence of product safety problems

• 成果类型: Article
• 署名作者: Wowak, Adam J.; Mannor, Michael J.; Wowak, Kaitlin D.
• 署名单位: University of Notre Dame
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2277
• 发表日期: 2015
• 页码: 1082-1092
• 关键词: upper echelons; Executive compensation; Stock options; CEOS; product safety

摘要

Stock options are thought to align the interests of CEOs and shareholders, but scholars have shown that options sometimes lead to outcomes that run counter to what they are meant to achieve. Building on this research, we argue that options promote a lack of caution in CEOs that manifests in a higher incidence of product safety problems. We also posit that this relationship varies across CEOs, and that the effect of options will depend upon CEO characteristics such as tenure and founder status. Analyzing product recall data for a large sample of FDA-regulated companies, we find support for our theory. Copyright (c) 2014 John Wiley & Sons, Ltd.