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Research co-authored by the assistant professor of finance evaluates executive compensation practices for businesses and their impact on corporate decision-making. Drew Peabody, assistant professor of finance in the Martha and Spencer Love School of Business, co-authored an article exploring executive compensation practices in businesses in the December 2022 issue of […]

Research co-authored by the assistant professor of finance evaluates executive compensation practices for businesses and their impact on corporate decision-making.

Drew Peabody, assistant professor of finance in the Martha and Spencer Love School of Business, co-authored an article exploring executive compensation practices in businesses in the December 2022 issue of Research in International Business and Finance.

Assistant Professor of Finance Drew Peabody

In “Does incentive conflict between CEOs and CFOs benefit firms? Implications for corporate decision-making,” Peabody and co-authors Feng Han and Qi Qin, both at Capital University of Economics and Business, evaluate how incentive conflict between CEOs and CFOs, defined as the disparity in risk-taking incentives between the two executives, impacts corporate decision-making.

“We find that when incentive conflict between CEOs and CFOs is larger, firms enjoy less risk through the adoption of more conservative financial policies,” the co-authors wrote in the article’s abstract. “Greater incentive conflict is associated with lower leverage, more cash holdings and lower net debt to EBITDA ratios. This decrease in risk is not at the expense of shareholders as greater incentive conflict increases firm value.”

The co-authors’ research suggests CFOs may have greater influence over financial decisions compared to investment decisions.

Peabody joined Elon in 2021 after teaching at the University of Texas at Dallas. He earned a doctorate in finance from the University of North Texas and has research interests in corporate finance, investments, agency theory, financial institutions, and financial accounting.

His professional experiences include investment product research analyst at GuideStone Financial Resources and campus minister at Rice University.

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