The corporate governance literature on potential remedies to the agency problem has focused largely on external control mechanisms, especially board independence. We instead consider how an internal, psychological factor – CEO organizational identification – might influence the extent to...

We propose a framework that advances our understanding of CEO retention decisions in misreporting firms. Consistent with economic intuition, outside directors are more likely to fire (retain) CEOs when retention (replacement) costs are high relative to replacement (retention) costs. When the...

Again and again, economists, corporate law scholars, and Congress have turned to reforms, like executive compensation reforms, as a solution to executive misbehavior. The root of the evil, they muse, is sky-high pay with only a flimsy connection to managerial performance. If CEO pay can only be...

We develop a model in which firms in financial distress design executive compensation contracts, hire and fire executives, and accept or reject government bailout funds that (if accepted) constrain the design of future compensation contracts. Using data from COMPUSTAT and ExecuComp (1992-2007)...