After decades of declining litigation risk, independent directors of public companies are viewed as effectively immune to personal litigation costs. However, the unexpected In re Investors Bancorp decision by the Delaware Supreme Court in 2017 lowered the liability threshold only for directors...

We examine whether risk-taking among the largest financial firms in the U.S. is related to CEO equity incentives before the 2008 financial crisis. Using data on U.S. Federal Reserve emergency loans provided to these firms, we find that the amount of emergency loans and total days the loans are...

Clawbacks are contractual provisions in executive compensation contracts that allow for an ex post recoupment of variable pay if certain triggering conditions are met. As a result of regulatory responses to financial crises and corporate scandals as well as of growing shareholder pressure to...

This paper studies costly pre-CEO executive skill accumulation by executives, followed by stable matching between firms and CEOs. An increase in the heterogeneity of firm size relative to executive type induces a decrease in the informational effect of skill accumulation, resulting in...

This paper studies costly pre-CEO executive skill accumulation by executives, followed by stable matching between firms and CEOs. An increase in the heterogeneity of firm size relative to executive type induces a decrease in the informational effect of skill accumulation, resulting in...

The large compensation received by bank executives is among the many factors blamed for the risk-taking that led to the 2008-2009 financial crisis. We test whether and how pay disparities between CEO and non-CEO executives—the so-called CEO pay gap—influenced risk taking at publicly traded...

We study pay spillovers within the network of peer compensation benchmarking and show that these can reconcile growth differences and convergence in CEO compensation. Specifically, compensation of a small group of prominent, highly-central network firms is shown to have a substantial spillover...

We find that firms that grant performance-contingent (p-c) equity awards with accounting-based vesting conditions to their CEOs have lower cost of debt and less restrictive loan terms. The benefits of p-c accounting awards on debt financing are greater when the moral hazard problem faced by...

CFOs wear many hats, as the primary agents responsible for financial reporting and control and as strategic partners within firms' top management teams. This paper uses an agency model to investigate how the role and responsibilities of the CFO affect reporting quality, firm value, and incentive...

Does personal litigation risk for independent directors materially affect firm valuation, compensation-related issues for independent directors, and board composition decisions? We use the unexpected In re Investors Bancorp decision in 2017 by the Delaware Supreme Court, which lowered the...