TY  - SER
AU  - Yost,Benjamin P.
TI  - Locked-in: the effect of CEOs' capital gains taxes on corporate risk-taking
KW  - Contabilidad
KW  - Publicaciones seriadas
KW  - Riesgo (Finanzas)
KW  - Administración de incentivos
N2  - I study the effects of CEOs’ unrealized capital gains tax liabilities (tax burdens) on corporate risk-taking. Recent work suggests that high tax burdens discourage CEOs from selling stock. I hypothesize that this causes the executives to become overexposed to firm-specific risk, thereby reducing their willingness to make risky corporate decisions. In a series of tests, I find that corporate risk-taking decreases as CEOs’ personal tax burdens increase. Further, firms with CEOs who are more locked-in to their stock positions (i.e., CEOs with higher tax burdens) experience larger increases in risk-taking following federal and state tax cuts. When I investigate the mechanism behind this relation, I find that tax cuts trigger stock sales by the locked-in executives, allowing for improved diversification. Overall, my findings indicate that the personal tax burdens of CEOs affect the firm by reducing executives’ preferences for risk at the corporate level
ER  -