Abstract

  
 

Citations



 


 



The Interactions Between R&D Investment Decisions and Compensation Policy


Harley E. Ryan Jr.


Georgia State University - Department of Finance

Roy A. Wiggins III


Bentley University - Department of Finance

Financial Management, Vol. 31, No. 1, Spring 2002

Abstract:     
We use a system of equations to investigate the endogenous relation between R&D investment and CEO compensation. Growth opportunity is positively related to the use of stock options. Stock options positively affect R&D while restricted stock has a negative influence. These results suggest that CEO compensation should balance incentive alignment and efficient risk sharing with risk-averse managers. Stock options are also found to be negatively related to leverage, but positively related to convertible debt. Additionally, this analysis suggests that institutional ownership directly influences R&D investment by providing managerial oversight and indirectly by influencing the compensation policy.

Accepted Paper Series


Date posted: March 6, 2002  

Suggested Citation

Ryan, Harley E. and Wiggins, Roy A., The Interactions Between R&D Investment Decisions and Compensation Policy. Financial Management, Vol. 31, No. 1, Spring 2002. Available at SSRN: http://ssrn.com/abstract=300522

Contact Information

Harley E. Ryan Jr. (Contact Author)
Georgia State University - Department of Finance ( email )
University Plaza
35 Broad Street, Suite 1221
Atlanta, GA 30303-3083
United States
404-651-2674 (Phone)
404-651-2630 (Fax)
Roy A. Wiggins III
Bentley University - Department of Finance ( email )
175 Forest Street
Waltham, MA 02154
United States
Feedback to SSRN (Beta)


Paper statistics
Abstract Views: 1,150

© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright
This page was processed by apollo7 in 0.281 seconds