I analyze the long-run performance and earnings management behavior of equity carve-outs conditioned on whether the executives received incentive stock options at the IPO date. Carve-outs that did not grant incentive stock options subsequently underperform both relative to the overall market and...

Understanding executive compensation and its effects helps design better organizations. Research on this area is thus of paramount importance. For large US companies, the ExecuComp database offers access to standardized and comprehensive executive compensation data. Hence, research on executive...

Wan (2013) argues that the statistical inferences in our Journal of Finance (2011) paper are not robust, as we do not prove that it is powerful CEOs that rig incentive contracts. Wan makes the theoretical claim that the rigging results are consistent with ex-post optimal re-contracting. However,...

The objective of this paper is to define the relationship between a set of factors and CEO compensation that will enable companies to imply better corporate governance practices in their management process. Developed econometric model is tested on the data of US telecom companies for the period...

Employee ownership is often used not only as a reward management tool but also as an entrenchment mechanism. The literature suggests that good managers use employee ownership as a reward management tool, whereas bad managers implement it for entrenchment, thus suggesting the existence of an...

The questions of whether there ever existed excessive risk-taking incentives from executive compensation in the financial industry, and whether top executives of financial services firms actually responded to such excessive incentives that eventually led to the crisis remain unanswered. The...

Agency theory suggests that high pay-performance sensitivity (PPS) of CEO's compensation is an important motivation mechanism to the CEO to improve corporate performance. We develop a simple model that suggests that reverse causality should also be considered. Specifically, our model predicts...

Does corporate governance affect the timing of large investment projects? Hazard model estimates suggest strong shareholder governance may deter managers from pursuing large investments. Controlling for investment opportunities, firms with good governance experience longer spells between large...

We study whether outside directors are held accountable for poor monitoring of executive compensation by examining the reputation penalties to directors of firms involved in the option backdating (BD) scandal of 2006–2007. We find that, at firms involved in BD, significant penalties accrued to...

This article examines the influence of equity capital ownership on human resource management practices. The empirical analysis uses the 2004-2005 Workplace Industrial Relations Survey (REPONSE survey), based on a sample of 2,930 establishments with 20 workers or more, representative of the...