Outcomes, risk-taking, and incentives: Evidence from asset managers
Abstract
We study incentive contracts used by asset management firms in Norway, focusing on how bonus structures impact performance. The incentive contracts in our sample are heterogeneous, with firms rewarding fund managers based on both quantitative and qualitative targets. We find that higher potential bonuses tied to quantitative metrics, such as the information ratio, lead to better risk-adjusted performance at year-end. Managers at risk of missing bonus thresholds attempt to boost performance through portfolio adjustments, but these efforts backfire, resulting in worse outcomes in the latter part of the year.
Fields of Study & Subjects
Financial Markets and Investment Strategies
Corporate Finance and Governance
Accounting and Organizational Management
Publication details
- Journal / source
- Journal of Corporate Finance
- Volume
- 98
- Pages
- 102974–102974
- Publication date
- 10 February 2026
- Language
- EN