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DTSTAMP:20240519T031826Z
SUMMARY:Gormley\, Todd A.- University of Pennsylvania - The Wharton School 
 and David A. Matsa - Northwestern University - Kellogg School of Managemen
 t\; National Bureau of Economic Research
DESCRIPTION: \n\n“Playing It Safe? Managerial Preferences\, Risk\, and Ag
 ency\nConflicts” Authors: Gormley\, Todd A.- University of Pennsylvania 
 -\nThe Wharton School and David A. Matsa - Northwestern University -\nKell
 ogg School of Management\; National Bureau of Economic Research\n\nAbstrac
 t:\nThis paper examines managers’ incentive to “play it safe” by\nta
 king value-destroying actions that reduce their firms’ risk of\ndistress
 . We find that\, after managers are insulated by the adoption\nof an antit
 akeover law\, firms take on less risk. Stock volatility\ndecreases\, cash 
 holdings increase\, and diversifying acquisitions\nincrease by more than a
  quarter relative to unaffected firms that\noperate in the same state and 
 industry. The acquisitions target\n“cash cows\,” have negative announc
 ement returns\, and are\nconcentrated among firms with greater risk of dis
 tress\, higher inside\nownership\, and younger CEOs. Our findings suggest 
 that shareholders\nface governance challenges beyond motivating managerial
  effort\, and\nthat instruments typically used to motivate managers\, like
  greater\nfinancial leverage and larger ownership stakes\, exacerbate thes
 e\nchallenges.\n 
DTSTART:20151002T140000Z
DTEND:20151002T160000Z
LOCATION:Gerri C. LeBow Hall\, 3220 Market Street\, Colloguium 722\, Philad
 elphia\, PA 19104
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