A common view in the literature is that the director labor market provides an ex post settling-up for past decisions by rewarding CEO ability and actions that are consistent with shareholder interests. In this paper we focus on large CEO acquisition decisions to investigate whether the director...

The value a director provides to a firm is empirically hard to establish. We estimate that value by exploiting the commonality in idiosyncratic returns of firms linked by a director and show that, on average, a single director's influence causes variation in firm value of almost 1% per year. The...

Although compensation contracts rarely include cash holdings as a factor, we show that high cash holdings can be used by executives in the ex post bargaining over compensation. An increase of cash holdings by 10% of assets corresponds to about $2.7 million in additional CEO total compensation....