Analysis co-authored by the assistant professor of finance evaluates govt compensation practices for companies and their affect on company decision-making.
Drew Peabody, assistant professor of finance within the Martha and Spencer Love College of Enterprise, co-authored an article exploring govt compensation practices in companies within the December 2022 difficulty of Analysis in Worldwide Enterprise and Finance.
In “Does incentive battle between CEOs and CFOs profit companies? Implications for company decision-making,” Peabody and co-authors Feng Han and Qi Qin, each at Capital College of Economics and Enterprise, consider how incentive battle between CEOs and CFOs, outlined because the disparity in risk-taking incentives between the 2 executives, impacts company decision-making.
“We discover that when incentive battle between CEOs and CFOs is bigger, companies take pleasure in much less danger by means of the adoption of extra conservative monetary insurance policies,” the co-authors wrote within the article’s summary. “Better incentive battle is related to decrease leverage, additional cash holdings and decrease internet debt to EBITDA ratios. This lower in danger is just not on the expense of shareholders as larger incentive battle will increase agency worth.”
The co-authors’ analysis suggests CFOs could have larger affect over monetary choices in comparison with funding choices.
Peabody joined Elon in 2021 after educating on the College of Texas at Dallas. He earned a doctorate in finance from the College of North Texas and has analysis pursuits in company finance, investments, company idea, monetary establishments, and monetary accounting.
His skilled experiences embody funding product analysis analyst at GuideStone Monetary Sources and campus minister at Rice College.