Existing research on CEO turnover focuses on CEO ability. This paper argues board ability is also important. Corporate boards will be reluctant to replace CEOs as this makes financing expensive by sending a negative signal about board ability. This differs from existing literature: entrenchment...

We show that stock-based CEO compensation can create a "race to the bottom" among firms that escalates short-termist pressure. More informative stock prices reduce the agency cost of incentivizing managers. Also, shortening a firm's project maturity improves stock price informativeness by...