CFO pay convexity, risk taking and corporate hedging-Reference-Cited by-同舟云学术

CFO pay convexity, risk taking and corporate hedging

Published:2023-08-24 Issue: Volume: Page:
ISSN:1354-7798
Container-title:European Financial Management
language:en
Short-container-title:Euro Fin Management

Author:

Barbi Massimiliano¹^ORCID,Febo Valentina²^ORCID,Massimiliani Irene³

Affiliation:

1. Department of Management University of Bologna Bologna Italy

2. Department of Law, Finance and Control EM Normandie Business School, Metis Lab Clichy France

3. Accenture Milan Italy

Abstract

AbstractWe study how a CFO's risk‐taking incentives affect corporate hedging by utilising hand‐collected data from 2009 to 2019 on corporate hedging and managerial compensation for a sample of US oil and gas firms. The relative convexity of CFO equity compensation negatively affects the likelihood and extent of hedging. When the CFO and CEO have diverging risk‐taking incentives, the relative convexity of the CFO's equity payoff prevails over that of the CEO. This evidence underscores the primary role of the CFO in steering a firm's hedging strategy.

Publisher

Wiley

Subject

General Economics, Econometrics and Finance,Accounting

Link

https://onlinelibrary.wiley.com/doi/pdf/10.1111/eufm.12455

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