Publicly traded firms in the U.S. typically determine C.E.O. compensation by benchmarking the pay of their C.E.O.s against the pay of C.E.O.s in “peer” firms. The naming of particular peer companies by individual firms constitutes a supra-firm relational structure (network) in which an...

This study examines the sophistication of rating agencies in incorporating managerial risk-taking incentives into their credit risk evaluation. We measure risk-taking incentives using two proxies: the sensitivity of managerial wealth to stock return volatility (vega) and the sensitivity of...