We show that CEOs of prestigious firms earn less. Total compensation is on average 8% lower for firms listed in Fortune's ranking of America's most admired companies. We suggest that CEOs are willing to trade off status and career benefits from working for a publicly admired company against...

Prior studies examine real firm behavior and show that high debt makes a firm vulnerable in the product market. In this study, we assess the economic magnitude of competitive effects of debt by examining stock returns. For identification, we use a double-layer of contrasts by conditioning our...

We document that suppliers to purely financially distressed companies that are highly likely to reorganize in bankruptcy incur little or no spillover costs. In contrast, suppliers to economically distressed firms experience large losses in market value which are linked to proxies for the cost of...

This paper investigates the information in corporate credit ratings. If ratings are to be informative indicators of credit risk they must reflect what a risk-averse investor cares about: both raw default probability and systematic risk. We find that ratings are relatively inaccurate measures of...

This paper explores the robustness of the positive association between shareholder rights and abnormal stock returns (using the Fama-French-Cahart four factor model) and potential explanations thereof. Utilizing hand-collected shareholder rights data for the 1978-1989 period in conjunction with...

Using 636 large acquisition attempts that are accompanied by a negative stock price reaction at their announcement (“value-reducing acquisition attempts”) from 1990-2010, we find that, in deciding whether to abandon a value-reducing acquisition attempt, managers' sensitivity to the firm's...

This paper investigates how personal connections influencing governance in executive suites are impacted by other governance mechanisms. We use the independent board requirement as an exogenous shock reducing CEO influence in the boardroom. CEOs of the treated firms recoup the loss of influence...

Increasing concern over corporate governance has led to calls for more shareholder in‡uence over corporate decisions, but allowing shareholders to vote on more issues, such as executive compensation, may not affect the quality of governance. We should expect instead that, under current rules,...