When a publicly traded company meets a pay-for-performance target, it may be lauded by Wall Street investors, however, new research from Washington University in St. Louis shows it can also be cause for concern.
The business of sports, said Joseph S. Lacob (left), co-executive chairman and CEO of the NBA’s Golden State Warriors, isn’t just fun and games. Future successful sports industry leaders must be innovative thinkers with a solid foundational business background, like the new minor in the business of sports at Olin Business School, a program he is helping launch with a $1 million gift.
A new study by a finance professor at Washington University in St. Louis finds that the amount of stock options in a CEO’s compensation package can result in an increase in risk-taking by company leaders. Such a finding seems obvious at first blush, but uncovering clean empirical evidence always has been illusive.
A trio of Olin Business School researchers — Radhakrishnan Gopalan, PhD, assistant professor of finance; Todd Milbourn, PhD, the Hubert C. and Dorothy R. Moog Professor of Finance; and Anjan Thakor, PhD, the John E. Simon Professor of Finance — says companies have not previously had the proper tools for determining how to pay executives and have developed a formula that businesses can use to align the duration, or payout, of an executive’s compensation with the strategic needs of the company.