We construct a measure of the pairwise relatedness of firms' human capital to examine whether human capital relatedness is a key factor in mergers and acquisitions. We find that mergers are more likely and merger returns and post-merger performance are higher when firms have related human...

Executive pensions and deferred compensation, collectively referred to as inside debt, tend to align CEO incentives with those of debt holders. Although CEO equity compensation is well known to induce risk-shifting incentives and thereby add to the agency cost of debt, too much inside debt may...