Outcomes, risk-taking, and incentives: Evidence from asset managers

Carsten Bienz; Diego Bonelli; Aksel Mjøs; Francisco Santos

doi:10.1016/j.jcorpfin.2026.102974

← Search

Outcomes, risk-taking, and incentives: Evidence from asset managers

Carsten Bienz¹; Diego Bonelli²; Aksel Mjøs¹; Francisco Santos¹

¹ Norwegian School of Economics · ² Bank of Spain

Journal of Corporate Finance 2026 open access

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.

DOI: 10.1016/j.jcorpfin.2026.102974
Volume: 98
Pages: 102974
Language: en
Export: BibTeX
Sources: openalex crossref