Cassell, Cory A.
[VerfasserIn]
;
Huang, Shawn X.
[Sonstige Person, Familie und Körperschaft];
Sanchez, Juan Manuel
[Sonstige Person, Familie und Körperschaft];
Stuart, Michael D.
[Sonstige Person, Familie und Körperschaft]
Anmerkungen:
In: Journal of Financial Economics, Vol. 103, No. 3, pp. 588-610, 2012
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 13, 2011 erstellt
Beschreibung:
CEO inside debt holdings (pension benefits and deferred compensation) are generally unsecured and unfunded liabilities of the firm. Because these characteristics of inside debt expose the CEO to default risk similar to that faced by outside creditors, theory predicts that CEOs with large inside debt holdings will display lower levels of risk-seeking behavior (Jensen and Meckling, 1976). Consistent with the theoretical predictions, we find a negative association between CEO inside debt holdings and the volatility of future firm stock returns, R&D expenditures, and financial leverage and a positive association between CEO inside debt holdings and the extent of diversification and asset liquidity. Collectively, our results provide empirical evidence suggesting that CEOs with large inside debt holdings prefer investment and financial policies that are less risky