Using a comprehensive sample of US banks for years 2001 to 2016, we split the pay gap between the CEO and rank-and-file employees into two: CEO pay gap and VP pay gap. We examine the effect on bank performance of the tournament incentives arising from these different pay gaps. We find that CEO...

Defining managerial sentiment as managers' beliefs about future firm outcomes that are unjustified by the information available to them, we hypothesize and find that managerial sentiment is associated with unintentional errors in accrual estimates. Using a sample of public banks, we find that:...