Managerial Attitudes and Corporate Actions | Zendy

John R. Graham | Zendy; Campbell R. Harvey | Zendy; Manju Puri | Zendy

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Managerial Attitudes and Corporate Actions

Author(s) -

John R. Graham,

Campbell R. Harvey,

Manju Puri

Publication year - 2011

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.1432641

Subject(s) - optimism , risk aversion (psychology) , preference , compensation (psychology) , psychology , empirical evidence , overconfidence effect , population , loss aversion , executive compensation , social psychology , accounting , actuarial science , business , economics , financial economics , microeconomics , expected utility hypothesis , finance , medicine , philosophy , environmental health , epistemology

We administer psychometric tests to senior executives to obtain evidence on their underlying psychological traits and attitudes. We find US CEOs differ significantly from non-US CEOs in terms of their underlying attitudes. In addition, we find that CEOs are significantly more optimistic and risk-tolerant than the lay population. We provide evidence that CEOs' behavioral traits such as optimism and managerial risk-aversion are related to corporate financial policies. Further, we provide new empirical evidence that CEO traits such as risk-aversion and time preference are related to their compensation.

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