Do executives demand a premium for working in polluted environments? We develop a model of optimal CEO compensation and find empirical support for its prediction that pollution will induce a higher fixed wage, but lower incentive pay. This is the case even if we exclude polluting firms. We...

Overconfident CEOs often ‘overinvest’ in R&D and capital expenditure. But, could there be a silver lining this such investment? We hypothesize that such investment can improve workplace safety. Firms with overconfident CEOs experience significantly fewer industrial accidents. This effect is...