Answers are grounded in this paper and cite their sources.
We study the relation between CEO restricted stock, CEO incentives, and firm innovation. We first show that restricted stock is negatively associated with R&D investment. We also show that CEO restricted stock is positively related to the number of patents granted and citations received. However, further investigation shows that CEO restricted stock has a positive relation with firm exploitation but a negative relation with firm exploration and breakthrough innovation. The results suggest that restricted stock appears to incentivize CEOs to make efficient R&D investments and produce more innovative outputs in general, but only through exploitation rather than exploration and breakthrough innovations.
No takes yet. Share an insight, caveat, or question.
Boli et al. (2024) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: