Over the past two decades, hedge fund activism has emerged as a new mechanism of corporate governance that brings about operational, financial and governance reforms to a corporation. Many prominent business executives and legal scholars are convinced that the entire American economy will suffer...

We identify the power of institutional blockholders to influence management using previous occurrences of forced CEO turnover at other firms in the blockholders' overall portfolio. We create a “powerful blockholder linkage” measure that strongly predicts future forced CEO turnover. These...

This paper investigates how precautionary trading behavior of fund managers induced by a higher junior fee component in their compensation structure affects prices of downgraded loans in the leveraged loans market. Using detailed portfolio data from Collateralized Loan Obligation (CLO) funds, we...

The literature posits that some CEO overconfidence benefits shareholders, though high levels may not. We argue adequate controls and independent viewpoints provided by an independent board mitigates the costs of CEO overconfidence. We use the concurrent passage of the Sarbanes-Oxley Act and...

Do 13D investors incentivize CEOs to increase total firm value or to increase only equity value? By using the hand-collected data of 5,775 U.S. public companies between 2006 and 2017, my paper documents evidence that these active blockholders restructure CEO compensation in a way that benefits...

I study the effect of passive institutional ownership on CEO compensation duration by exploiting exogenous variation in passive ownership associated with Russell Index reconstitution. A one-standard-deviation increase in passive ownership leads to a 0.46-standard-deviation increase in...

Prior literature examines the matching of firm-types with board composition, but very little research focuses on the matching of CEO types with directors' skill sets. We examine whether a gender-diverse board helps to mitigate the negative impacts of overconfident managers, thus improving firm...

We show that managerial learning from stock prices can lead to feedback loop vulnerability: liquidity-induced trading can impose a negative externality on the firm's investment decisions, inducing liquidity unconstrained investors to sell their stock holdings. Interestingly, overconfident...

While boards are known to react to corporate misconduct by removing the executives responsible, little is known about whether the board's response is shaped by the firm's social context. Using the 2006 stock option backdating scandal, in which firms manipulated stock option grant dates, we...

While poor firm performance has been shown to be an important predictor of CEO dismissal, financial performance alone cannot explain the increased incidence of CEO dismissal. The complex and ambiguous relationship between poor firm performance and CEO dismissal is due in part to the uncertainty...