“…While the majority of studies suggest that performance‐based pay amplifies executive risk taking (e.g., Coles, Daniel, & Naveen, ; Rajgopal & Shevlin, ; Shue & Townsend, ), some studies find opposite results (e.g., Tosun, ), or even no relationship (e.g., Hayes et al, ; Mehran, ; Yermack, ). We suggest that partially explaining these somewhat mixed findings is the fact that the effectiveness of performance‐based pay in inducing CEO risk taking likely varies depending upon a CEO's attitude toward risk (Wowak & Hambrick, ), which is consistent with upper echelon and behavioral finance research.…”