This study seeks to understand how executive director heterogeneity affects the performance of US banks. To measure the expected performance effects linked to director heterogeneity, we compute changes in the market valuation of banks linked to announcements of executive director appointments....

We analyze how the structure of executive compensation affects the risk choices made by bank CEOs. For a sample of acquiring US banks, we employ the Merton distance to default model to show that CEOs with higher pay-risk sensitivity engage in risk-inducing mergers. Our findings are driven by two...

Bank payouts divert cash to shareholders, while leaving behind riskier and less liquid assets to repay debt holders in the future. Bank payouts, therefore, constitute a type of risk-shifting that benefits equity holders at the expense of debt holders. In this paper, we provide insights on how...

We investigate the link between the incentive mechanisms embedded in CEO cash bonuses and the riskiness of banks. For a sample of U.S. and European banks, we employ the Merton distance to default model to show that increases in CEO cash bonuses lower the default risk of a bank. However, we find...

We exploit variation in the cultural heritage across U.S. CEOs who are the children or grandchildren of immigrants to demonstrate that the cultural origins of CEOs matter for corporate outcomes. Following shocks to industry competition, firms led by CEOs who are second- or third-generation...

We use the staggered adoption of same-sex marriage legalization across the U.S. to study its effects on access to credit for same-sex couples. Following the legalization of same-sex marriage, same-sex couples are more likely to be denied mortgage credit compared to opposite-sex couples. Our data...

We examine how the information environment influences bank regulatory monitoring. Using the distance between banks and regulatory field offices as a proxy for information asymmetry, we show that an increase in distance reduces the quality of financial reporting. To establish causality, we use a...