Dual Ownership and Risk-taking Incentives in Managerial Compensation

Speaker: Tao Chen
Speaker Intro:
Tao Chen joined Nanyang Business School (NBS) as an Assistant Professor in Finance in 2014. His research interest focuses on how financial market participants influence corporate policies, particularly issues related to environmental, social and corporate governance (ESG) and how FinTech and financial innovation affect financial inclusion and risk.
He has published his work in Journal of Financial Economics (×2), Management Science (×3), Journal of Financial and Quantitative Analysis, Strategic Management Journal, Journal of Management Information Systems, Journal of Banking and Finance (×2), Journal of Corporate Finance (×2), Journal of Empirical Finance, and Accounting and Finance. His papers have been presented at major finance conferences including AFA, WFA, EFA, SFS Cavalcade, AAA, FIRS, ABFER, Finance Down Under, ECCCS, top business schools, such as MIT Sloan, NYU Stern, UPenn Wharton, Cambridge Judge, LBS, LSE, UF Warrington, UNC Kenan-Flagler, leading institutions, such as NBER, Federal Reserve Board, BIS, Luohan Academy, and covered by Financial Times, VoxEU, Lianhe Zaobao, and the Network for Business Sustainability.
Tao was elected to join the Board of Directors of Asian Finance Association (AsFA), and was invited to serve as an HKIMR Visiting Research Fellow by Hong Kong Monetary Authority (HKMA) and a Societal Impact Fellow by NTU Institute of Science and Technology for Humanity (NISTH). He has received numerous awards, including CUHK Young Scholars Award, NBS Teaching Excellence Award, Outstanding Paper Award in Annual Conference on Asia-Pacific Financial Markets, Best Paper Award in Asian Finance Association Annual Meeting, and Pioneer Award in 2020 Peak Initiative of Digital Finance Open Research. He was also nominated for the Nanyang Research Award (Young Investigator).
Host: Xiaoran Huang

This paper studies how managerial compensation is shaped by the risk preference of shareholders. Firms with a large ownership held by dual holders, institutional investors that simultaneously hold equity and bonds of the company, choose a less risk-inducing compensation structure. Exploiting financial institution mergers that create dual holders for portfolio companies, we identify a causal link between dual ownership and CEO compensation policies. Mutual fund proxy voting data suggest that shareholder voting is an important channel for dual holders to implement less convex contracts.

Time: 2021-11-16(Tuesday)16:40-18:00
Venue: The seminar will be held online
Organizer: 厦门大学经济学院、王亚南经济研究院

Contact information

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