{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/110657"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/110657","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Nonfinancial performance measures and risk-taking: evidence from the oil and gas industry","abstract":"This study examines the relation between nonfinancial performance measures (NFPMs) and firms’ risk-taking using CEO compensation contracts in the oil and gas industry (SIC 1311). The oil and gas industry provides an ideal setting for my study because firms in this industry are required to disclose detailed information about their risk activities, which allows me to develop empirical measures for firm risk-taking behavior. I find NFPMs that incentivize risk-taking are effective. More importantly, I find that firms with these NFPMs also invest in more low-risk activities and achieve better short-term financial performance compared to other firms. These results are consistent with my hypothesis that explicit incentives to invest in risky projects induce risk averse managers to manage the associated downside risk of failure by allocating limited resources across other low-risk projects. My findings shed light on how NFPMs can potentially complement equity-based incentives and financial accounting measures to direct and motivate managers to take on risky projects as well as better manage firm performance.","abstract_html":"This study examines the relation between nonfinancial performance measures (NFPMs) and firms’ risk-taking using CEO compensation contracts in the oil and gas industry (SIC 1311). The oil and gas industry provides an ideal setting for my study because firms in this industry are required to disclose detailed information about their risk activities, which allows me to develop empirical measures for firm risk-taking behavior. I find NFPMs that incentivize risk-taking are effective. More importantly, I find that firms with these NFPMs also invest in more low-risk activities and achieve better short-term financial performance compared to other firms. These results are consistent with my hypothesis that explicit incentives to invest in risky projects induce risk averse managers to manage the associated downside risk of failure by allocating limited resources across other low-risk projects. My findings shed light on how NFPMs can potentially complement equity-based incentives and financial accounting measures to direct and motivate managers to take on risky projects as well as better manage firm performance.","abstract_has_math":false,"creators":["Kim, Minjeong"],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Accountancy","degree_department":null,"school":null,"contributors":["Chen, Clara","Brown, Nerissa","Du, Fei","Li, Laura","Irani, Rustom"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2021,"date_issued":"2021-09-17T02:34:24Z","date_published":"2021-09-17T02:34:24Z","updated_at":"2026-07-22T22:24:52Z","subjects":["Risk-taking","executive compensation","nonfinancial performance measure"],"languages":["en"],"rights":["Copyright 2021 Minjeong Kim"],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"http://hdl.handle.net/2142/110657","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Chen, Clara","Brown, Nerissa","Du, Fei","Li, Laura","Irani, Rustom"]},{"key":"dc:creator","label":"Author","values":["Kim, Minjeong"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2021-09-17T02:34:24Z","2023-09-17T02:34:57Z","2021-04-13","2021-05"]},{"key":"dc:type","label":"Dc Type","values":["text","Thesis"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Accountancy"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Risk-taking","executive compensation","nonfinancial performance measure"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 2021 Minjeong Kim"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["http://hdl.handle.net/2142/110657"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["This study examines the relation between nonfinancial performance measures (NFPMs) and firms’ risk-taking using CEO compensation contracts in the oil and gas industry (SIC 1311). The oil and gas industry provides an ideal setting for my study because firms in this industry are required to disclose detailed information about their risk activities, which allows me to develop empirical measures for firm risk-taking behavior. I find NFPMs that incentivize risk-taking are effective. More importantly, I find that firms with these NFPMs also invest in more low-risk activities and achieve better short-term financial performance compared to other firms. These results are consistent with my hypothesis that explicit incentives to invest in risky projects induce risk averse managers to manage the associated downside risk of failure by allocating limited resources across other low-risk projects. My findings shed light on how NFPMs can potentially complement equity-based incentives and financial accounting measures to direct and motivate managers to take on risky projects as well as better manage firm performance.","Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2023-05-01","The student, Minjeong Kim, accepted the attached license on 2021-04-12 at 11:57.","The student, Minjeong Kim, submitted this Dissertation for approval on 2021-04-12 at 12:03.","This Dissertation was approved for publication on 2021-04-13 at 16:56.","DSpace SAF Submission Ingestion Package generated from Vireo submission #16286 on 2021-09-16 at 17:02:55","Made available in DSpace on 2021-09-17T02:34:24Z (GMT). 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The oil and gas industry provides an ideal setting for my study because firms in this industry are required to disclose detailed information about their risk activities, which allows me to develop empirical measures for firm risk-taking behavior. I find NFPMs that incentivize risk-taking are effective. More importantly, I find that firms with these NFPMs also invest in more low-risk activities and achieve better short-term financial performance compared to other firms. These results are consistent with my hypothesis that explicit incentives to invest in risky projects induce risk averse managers to manage the associated downside risk of failure by allocating limited resources across other low-risk projects. My findings shed light on how NFPMs can potentially complement equity-based incentives and financial accounting measures to direct and motivate managers to take on risky projects as well as better manage firm performance.","Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2023-05-01","The student, Minjeong Kim, accepted the attached license on 2021-04-12 at 11:57.","The student, Minjeong Kim, submitted this Dissertation for approval on 2021-04-12 at 12:03.","This Dissertation was approved for publication on 2021-04-13 at 16:56.","DSpace SAF Submission Ingestion Package generated from Vireo submission #16286 on 2021-09-16 at 17:02:55","Made available in DSpace on 2021-09-17T02:34:24Z (GMT). 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