This paper investigates under what circumstances boards of directors fire CEOs and whether this action leads to better firm performance. We use unique and detailed data, covering 473 companies in the transition region, on boards’ actions, expectations and beliefs about CEO ability. We find...

We test under what circumstances boards discipline managers and whether such interventions improve performance. We exploit exogenous variation due to the staggered adoption of corporate governance laws in formerly Communist countries coupled with detailed ‘hard’ information about the...

This study explores whether firms with powerful CEOs tend to invest (more) in corporate social responsibility (CSR) activities as the over-investment hypothesis based on classical agency theory predicts. In addition, this paper tests an alternative hypothesis that if CSR investment is indeed an...

Using novel data on companies' midyear pay actions taken in response to COVID-19 disruptions, I find that 30% of firms reduced CEOs' base salaries. Salary reductions served to "share the pain" with stakeholders. CEOs suffering salary cuts, however, often saw lower targets for annual and...

We develop a dynamic principal-agent model for financing a multistage project. The optimal contract displays the following unique features: (i) There is a pecking order between milestone bonuses and deferred compensation: when an intermediate stage succeeds, principal prefers to use deferred...

We test under what circumstances boards discipline managers and whether such interventions improve performance. We exploit exogenous variation due to the staggered adoption of corporate governance laws in formerly Communist countries coupled with detailed 'hard' information about the board's...