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Department of Applied Finance and Actuarial Studies

Seminar by Jyotirmoy Podder

Research Seminars - business and economics
  • Topic: Incentives and risk taking: Evidence from listed US insurance companies
  • Speaker: Jyotirmoy Podder, PhD Candidate, Department of Accounting and Finance, Monash University
  • Venue:Seminar Room, Level 6, Room 623, E4A
  • Time: 11.30am - 12.30pm (Morning Tea from 11am)

This study examines the relation between incentives and risk taking for 104 listed US insurance companies over 2006-2010. Our results show that independent director compensation is positively related to risk taking as are CEO compensation and institutional ownership. Besides dollar value and proportion of stock based compensation, we document similar results with total compensation. In terms of institutions, dedicated institutional ownership rather than total institutional ownership is found positively related to risk taking.
These findings suggest that the stock based compensation of independent directors and the CEO help to align their interests with that of the shareholders when dedicated institutional owners serve as external monitors. Our results are robust to several methods, different risk taking measures and a wide range of control variables.

View the full paper "Incentives and risk taking: Evidence from listed US insurance companies" (PDF)


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