Date of Award
Fall 2024
Document Type
Dissertation
Degree Name
Doctor of Business Administration (DBA)
Committee Chair
Christine Sutton
Abstract
Banks are among the most powerful corporations across the globe. The banking sector is the lifeblood of the economy, and excessive bank failure can have devasting consequences for economies worldwide. The economic crisis of 2008 began in the U.S. and encapsulated other countries. Using regression analysis models, this study examined the relationship between specific executive compensation elements and the organizational strategies used to manage enterprise risk through the lens of Behavioral Agency Theory (BAM). BAM is incorporated into the study to explain how different forms of executive compensation influence executives’ tendencies to appropriately mitigate gains and losses. Historically, incurred agency costs include both long-term incentives such as IRAs and shorter-term incentives like stock options. Equity-based incentives, such as stock, can be traded on the market for short-term gains or losses, while incentives more associated with debt rise to maturity more slowly and produce long-term gains for the executive’s compensation package. The sample for this study included a total of 91 U.S. commercial banks. The findings are consistent with existing literature on compensation components and executive attributes where pay structures of CEOs and CFOs had statistically significant influence on enterprise risk management practices using some measures of the construct, but not others. This study has important insights for all stakeholders about how to best incentivize top managers in the financial services industry to safely manage enterprise risks.
Recommended Citation
Austin-Campbell, Stephanie, "Risky Business: Executive Compensation Attributes and Enterprise Risk Management" (2024). Doctor of Business Administration Dissertations. 10.
https://digitalcommons.gardner-webb.edu/business-dissertations/10
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial 4.0 License
Included in
Business Administration, Management, and Operations Commons, Finance and Financial Management Commons
