We provide the first evidence of significant external labor market penalties when directors fail to properly oversee executive compensation. When shareholders express disapproval through low Say-On-Pay (SOP) support, equity values decrease at firms linked by a shared director (interlocking...

We provide the first evidence of external labor market penalties when directors fail to align with shareholder preferences for monitoring executive compensation. When shareholders express disapproval through low Say-On-Pay (SOP) support, directors incur significant external penalties, including...

We study the effect of changes in CEO inside debt on equity and debt values during the period in which firms' disclosure of inside debt increased. We predict optimal CEO relative debt-equity incentive ratios based on firm and CEO characteristics, and show that firms adjust their ratios towards...

Initial public offering (IPO) underpricing is positively correlated with managerial confidence. We hypothesize that highly overconfident managers, who tend to overvalue their own firm, use underpricing to signal their beliefs to the market in an effort to receive greater value for their shares...

Motivated by studies that show overconfident agents are more competitive, we test whether overconfident CEOs respond differently and perform better when competition increases. Using tariff reductions as exogenous shocks to competition and a triple-difference specification on matched samples, we...

Extant research suggests that moderate CEO optimism can be beneficial to the firm. However, little is known about how boards of directors learn the effects of CEO optimism. Evidence from psychology indicates that individuals/groups may learn more from failure than success, while a simple...