CEO Personal Risk-Taking and Corporate Policies

Matthew D. Cain · Stephen B. McKeon

480 citations0/0 files storedJournal of Financial and Quantitative Analysis

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Financial Markets and Investment Strategies Risk Management in Financial Firms

Abstract

Abstract This study analyzes the relation between chief executive officer (CEO) personal risk-taking, corporate risk-taking, and total firm risk. We find evidence that CEOs who possess private pilot licenses (our proxy for personal risk-taking) are associated with riskier firms. Firms led by pilot CEOs have higher equity return volatility, beyond the amount explained by compensation components that financially reward risk-taking. We trace the source of the elevated firm risk to specific corporate policies, including leverage and acquisition activity. Our results suggest that nonpecuniary risk preferences revealed outside the scope of the firm have implications for project selection and various corporate policies.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 480 citations exist upstream.

References

1993Common risk factors in the returns on stocks and bonds 1995What Do We Know about Capital Structure? Some Evidence from International Data 1964Risk Aversion in the Small and in the Large 1976Risk Aversion in the Small and in the Large 1985The Determinants of Firms' Hedging Policies 2005Managerial incentives and risk-taking☆1981Risk Reduction as a Managerial Motive for Conglomerate Mergers 2008Who makes acquisitions? CEO overconfidence and the market's reaction☆

Cited by

2016Pilot CEOs and corporate innovation 2011Corporate Policies of Republican Managers 2013Executives' “off-the-job” behavior, corporate culture, and financial reporting risk 2021Senior management's academic experience and corporate green innovation 2012CEO Gender, Corporate Risk-Taking, and the Efficiency of Capital Allocation 2017CEO social capital, risk-taking and corporate policies

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.