Analysis co-authored by the assistant professor of finance evaluates govt payment practices for companies and their effects on company selection-earning.
Drew Peabody, assistant professor of finance in the Martha and Spencer Enjoy College of Business, co-authored an article exploring executive payment techniques in corporations in the December 2022 difficulty of Study in Worldwide Company and Finance.
In “Does incentive conflict amongst CEOs and CFOs benefit corporations? Implications for corporate final decision-producing,” Peabody and co-authors Feng Han and Qi Qin, equally at Money College of Economics and Business enterprise, examine how incentive conflict among CEOs and CFOs, outlined as the disparity in possibility-getting incentives in between the two executives, impacts corporate selection-earning.
“We locate that when incentive conflict among CEOs and CFOs is much larger, corporations delight in less chance by means of the adoption of more conservative economic procedures,” the co-authors wrote in the article’s summary. “Greater incentive conflict is connected with decreased leverage, a lot more cash holdings and lessen web credit card debt to EBITDA ratios. This lower in possibility is not at the expenditure of shareholders as greater incentive conflict increases company worth.”
The co-authors’ research implies CFOs could have better influence more than fiscal conclusions compared to expense conclusions.
Peabody joined Elon in 2021 soon after teaching at the College of Texas at Dallas. He acquired a doctorate in finance from the University of North Texas and has analysis pursuits in company finance, investments, company theory, economic establishments, and fiscal accounting.
His experienced experiences involve investment decision products exploration analyst at GuideStone Financial Sources and campus minister at Rice University.