How Temporal Focus Shapes the Influence of Executive Compensation on Risk Taking
基于行为代理模型，研究发现当前聚焦的CEO遵循禀赋效应，而未来聚焦的CEO则逆转该效应，即未来聚焦的CEO将预期财富视为禀赋，从而改变薪酬与风险承担的关系。
The behavioral agency model (BAM) posits that executives endow current wealth, but do not endow prospective wealth. As a result of this endowment effect, executives are risk averse with current wealth and risk seeking with prospective wealth. These relationships, however, assume that all executives perceive and attend to current and future outcomes similarly, which is at odds with research on temporal orientations. Drawing on the concept of temporal focus, we theorize that present-focused CEOs adhere to the BAM’s endowment effect, while exhibiting even stronger relationships between current and prospective wealth and risk taking. In contrast, by nature of being forward-looking, future-focused CEOs endow prospective wealth instead of current wealth, thereby reversing the main relationships of the BAM. Using a sample of 7,700 CEO-year observations from 2003 to 2016, we find empirical support for our arguments in the context of merger and acquisition investment. Findings from this study advance the BAM by showing that the relationship between wealth type and risk taking hinges on CEOs’ temporal focus.