2021
DOI: 10.1111/jifm.12142
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Impact of pay disparities between chief executive officers and chief financial officers on corporate financial and investment policies

Abstract: We study whether and how pay disparities between chief executive officers (CEOs) and chief financial officers (CFOs) affect corporate policies. Consistent with the tournament theory, we find a positive association between the CEO–CFO pay disparity and aggressiveness in corporate financial and investment policies. Specifically, a firm with a large CEO–CFO pay disparity tends to have an aggressive capital structure and tilt toward high‐risk investments. Furthermore, we test the impact of the CEO–CFO pay disparit… Show more

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Cited by 3 publications
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References 64 publications
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