CEO compensation, diversification, and incentives

@article{Jin2002CEOCD,
  title={CEO compensation, diversification, and incentives},
  author={L. Jin},
  journal={Journal of Financial Economics},
  year={2002},
  volume={66},
  pages={29-63}
}
  • L. Jin
  • Published 2002
  • Economics
  • Journal of Financial Economics
  • This paper examines the relation between chief executive officers’ (CEOs’) incentive levels and their firms’ risk characteristics. I show theoretically that, when CEOs cannot trade the market portfolio, optimal incentive level decreases with firm's nonsystematic risk but is ambiguously affected by firm's systematic risk; when CEOs can trade the market portfolio, optimal incentive level decreases with nonsystematic risk but is unaffected by systematic risk. Empirically I find support for these… CONTINUE READING
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