We estimate the effect of acquisition performance and acquisition activity on CEO compensation for the full set of CEOs of large public U.S. corporations in the Execucomp database over the period 1992-2016. Most previous work has focused on publicly traded acquisition targets. We focus on the...

This study examines the effect of the CEO-employee pay gap on productivity and performance. Using extensive data of 751 constituents of the Standard and Poor's (S&P) 1500 index between the years 1992-2016, we found a cubic relationship between salary differential and corporate productivity, with...

We survey directors and investors on the objectives, constraints, and determinants of CEO pay. 67% of directors would sacrifice shareholder value to avoid controversy on CEO pay, implying they face significant constraints other than participation and incentive compatibility. These constraints...

CEOs of large firms filing for bankruptcy are more likely to exit the executive labor market after bankruptcy and experience substantial compensation losses (Eckbo et al., 2016). While the fear of reputational scarring can lead to lower risk-taking and manifest itself as lower rates of...

Purpose: This study examines the moderating impact of corporate governance quality on the relation between CEO bonus compensation and accounting conservatism. Design/methodology/approach: We use market-based and accrual-based measures to estimate accounting conservatism. According to prior...

From the perspective of non-financial performance, this study investigates the effect of corporate awards on executive compensation. We find that as a measure of non-financial performance, corporate awards help increase executive compensation by demonstrating the company’s status in the...

Executives are often paid for short-term changes in shareholder wealth, but rational shareholders want executives to maximize long-term shareholder wealth. Incentives for short-term and long-term oriented behavior may depend on an executive's level of pay in the distribution, holding other...

We investigate the (unintended) effects of bank executive compensation regulation. Capping the share of variable compensation spurred average turnover rates driven by CEOs at poorly performing banks. Other than that, banks‘ responses to raise fixed compensation sufficed to retain the vast...

As the direction and strategies of new ventures depend on the top management team (TMT)'s stability and continuous efforts, we investigate the relationship between executive turnover and research and development (R&D) investment investment. Furthermore, we assess the moderating role of the...

We examine shareholder monitoring in the context of executive pay–carbon performance sensitivity among U.S. firms. While corporates are under pressure to curb their greenhouse gas emissions, still little is known about the incentive structures for managers in this context. We document that a...

Cost heterogeneity is an important source of performance disparity among firms.This heterogeneity conditions the strategic decisions that firms make in the productmarket and can lead to heterogeneity in the design of managerial compensation contracts.I investigate the effect of cost...

This study adopts behavioral contract theory through a mathematical model and clarifies the situation in which a fixed–salary contract is preferable to incentives–based one for the principal. Theoretically, the expected utility for the principal is higher under an incentives–based contract...

The role of company directors in awarding new CEO compensation has become more complex in recent decades with the creation of a new CEO labor market. Directors can potentially utilise their relationships with prospective CEOs to determine new CEO compensation in pursuit of an optimal contract...

We analyze the incentives of CEO inside debt in the form of pensions and deferred compensation in the context of merger and acquisition decisions. CEO inside debt holdings are negatively associated with the likelihood of the firm engaging in merger or acquisition activity. When firms with...

In this paper we examine changes in the relationship between bank risk and the structure of bank CEO compensation following the enactment of the Dodd-Frank Act of 2010. Using a diff-in-diff methodology, we find significant differences between high and low pay-risk sensitivity banks....

The traditional view of executive pay as a financial incentive to enhance firm performance that is often equated with shareholder value maximization has been put into question in the last few years. The rise of the new purpose of the corporation and stakeholder capitalism has put that...

We investigate the effect of CEO hedging on the likelihood and characteristics of M&A decisions. Because of their higher degree of risk tolerance, hedged CEOs are more likely to engage in M&As and are more likely to acquire private and smaller targets. M&A deals by hedged CEOs appear to create...

This study addresses concerns from the SEC and examines the trend of shareholder activism and its impact on financial players. Motivated by prior research that finds female CEOs are more likely to be targeted by shareholder activism, we examine how the nature of shareholder activism...

Components of compensation have been analysed in previous studies of corporate financial variables of interest but never together to get a sense of the complete picture of what truly matters. This paper includes variable interactions using the difference-in-differences methodology for panel...

This article has a two-fold purpose. First, we investigate whether the CEOs’ risk-taking incentives are associated with better concurrent firm performance. Second, we examine the impact of gender on the aforementioned relationship. We find solid empirical evidence that CEOs’ risk-aversion...

The hottest topic in corporate governance circles today involves company commitments to and pursuit of ESG (environmental, social, and governance) initiatives in addition to the traditional pursuit of profits. One facet of this debate has to do with how to motivate executives to pursue ESG...

Chief executive officers (CEOs) are typically paid great amounts of money in wages and bonuses by commercial companies. This is sometimes defended with an argument from peer comparison; roughly that "our" CEO has to be paid in accordance with what other CEOs at comparable companies get. At first...

This study examines whether the CEO uses share repurchases to sell her equity grants at inflated stock prices, a concern regularly voiced in politics and media. We find that the timing of buyback programs and equity compensation, i.e., the granting, vesting, and selling of equity, is largely...

This paper investigates the impact of firms’ positions in the network of intersectoral input-output linkages on the use, intensity, and implementation of relative performance evaluation (RPE) in CEO compensation contracts. Consistent with a fundamental but not thoroughly investigated...

We analytically study the economic consequences of the disclosure of managerial compensation contracts in a setting where two firms, by designing compensation contracts for their respective managers, compete for a new investment opportunity. Each manager is privately informed about her firm's...

We analyze the effects of optimism and overconfidence when the manager's compensation package includes severance pay and the CEO has bargaining power. We find that optimism does not affect incentive pay but increases severance pay with a negative effect on profit. Overconfidence, on the...

We investigate the effectiveness of tournament theory based on the age gap between the CEO and the top management team (TMT) in Korean firms. While tournament incentives encourage managers to work harder to improve their performance, their effects may differ on executives’ sociological and...

This paper examines the use of ESG performance metrics in executive compensation contracts. We first document that a growing fraction of publicly traded companies around the world now incorporate ESG metrics in the compensation schemes of their top executives. Our analysis links the reliance on...

This paper examines the use of ESG performance metrics in executive compensation contracts. We first document that a growing fraction of publicly traded companies around the world now incorporate ESG metrics in the compensation schemes of their top executives. Our analysis links the reliance on...