Abstract
This study examines the impact of operational risk on CEO compensation in the property-liability insurance industry. We find that property-liability CEOs are not penalised for operational risk in terms of cash-based compensation, while they are penalised in terms of their option-based compensation. Our findings also suggest that CEOs are largely insulated from firm level operational losses in terms of their total compensation. These findings have implications for implementing optimal risk-based contracting decisions for CEO compensation contracts.
Original language | English |
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Pages (from-to) | 407-424 |
Number of pages | 18 |
Journal | International Journal of Business Innovation and Research |
Volume | 12 |
Issue number | 4 |
DOIs | |
Publication status | Published - 2017 |
Keywords
- CEO compensation
- Corporate governance
- Insurance
- Operational risk
ASJC Scopus subject areas
- Business and International Management
- Management of Technology and Innovation