Small business….. of-interest, need-to-know and news-to-watch…
Excerpt……Our results consistently indicate that greater equity risk incentives are associated with higher tax risk; however, higher tax risk does not necessarily imply greater equity risk incentives. These findings are robust to alternative estimation methods (i.e., simultaneous system of equations vs. OLS with lagged instrumental variable). We also find little evidence that the relation between equity risk incentives and risky tax avoidance varies by strength of corporate governance. Overall, we infer that equity risk incentives cause managers to undertake risky tax strategies in an effort to increase stock return volatility, and thus the value of their option portfolios
Read full article…via Equity Risk Incentives and Corporate Tax Aggressiveness — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
