This note compares the investment policy and managerial compensation in family and non-family firms. The model is based on one hand a manager/shareholders conflict that should be more pronounced in non-family firms. Secondly large shareholders/small shareholders conflict should play a...

This paper surveys the recent literature on CEO compensation. The rapid rise in CEO pay over the past 30 years has sparked an intense debate about the nature of the pay-setting process. Many view the high level of CEO compensation as the result of powerful managers setting their own pay. Others...

IPO firms with high-powered CEO incentive contracts have lower failure rates in the aftermarket. Economically, an interquartile change in the distribution of CEO pay translates in a reduction of the failure risk probability by approximately 21%. The Pay Gap between the CEO and its subordinate...

Using the pay gap between a firm’s CEO and the highest-paid CEO among similar competing firms to conceptualize the prize of winning external promotion tournaments, we document a positive relationship between external tournament incentives (ETIs) and IPO underpricing – a proxy of the cost of...

This paper develops a framework for studying individuals' ideas about what constitutes just compensation for chief executive officers (CEOs) and reports estimates of just CEO pay and the principles guiding ideas of justice. The sample consists of students pursuing a Master of Business...

We investigate whether the firm's corporate governance affects the value of equity grants for its CEO. Consistent with the managerial power view, we find that more poorly governed firms grant higher values of stock options and restricted stock to their CEOs after controlling for the economic...

Are firms' financial disclosure decisions affected by executive compensation at other firms? We find that a CEO's pay gap relative to the highest CEO pay among industry peers, defined as industry tournament incentives, can lead to distortions in corporate financial disclosures. Our analyses show...