In this project, we developed codes to model the effect of CEO compensation on the CEO career horizon problems ( CEOs that approach retirement reduce R&D in order to preserve wealth). Our codes handle many aspects of the R&D and its association with career horizon, CEO’s age, CEO inside debt, etc. The codes calculate the required variables and then estimate a variety of regressions. Specifically, the following variables are calculated:
- R&D and growth rate in R&D
- CEO relative leverage
- Deferred Compensation and pension value
- CEO equity calculated from stock holdings and options
- Firm debt
- Firm equity
- CEO VEGA – CEO’s sensitivity with respect to a 0.01 change in stock-return volatility.
- DELTA – CEO’s sensitivity with respect to a 1% change in stock price.
- Cash surplus
The Stata codes also estimate different regressions for robustness checks.
Our Stata Code
We have developed easy to use yet robust codes for the above steps. The codes need just a basic understanding of Stata. Further, our comments on each line of code will surely help you in running the code as well as in understanding the process more clearly.
The code is available for $ $299, plus a $50 for raw data processing (in case the data is not in Stata format and variables are not already constructed). For further details, please contact us at: