The role of risk in executive compensation

Samuel R. Gray, Albert A. Cannella

Research output: Contribution to journalArticlepeer-review

144 Scopus citations


The present study was designed to investigate the role of risk in executive compensation. We argue that compensation arrangements may be used to mitigate agency problems by encouraging risk taking behavior and providing incentives for optimizing long-term performance. We examine total compensation, compensation risk, and compensation time horizon. Consistent with our theory, the evidence indicates that these dimensions vary with the financial and strategic context of the firm and with the risk-taking propensity of the CEO.

Original languageEnglish (US)
Pages (from-to)517-540
Number of pages24
JournalJournal of Management
Issue number4
StatePublished - 1997
Externally publishedYes

ASJC Scopus subject areas

  • Finance
  • Strategy and Management


Dive into the research topics of 'The role of risk in executive compensation'. Together they form a unique fingerprint.

Cite this