We investigate how board expertise affects CEO incentives and firm value. The CEO engages in a sequence of tasks: first acquiring information to evaluate a potential project, then reporting his assessment of the project to the board, and finally implementing the project if it is adopted. We...

This paper provides a new explanation for CEO turnover. In an environment in which all potential CEOs are endowed with the same ability and the firm is not looking for a strategy change, I demonstrate that CEO turnover may still occur in equilibrium. Specifically, a performance-contingent CEO...

We study a dynamic multi-agent model with a verifiable team performance measure and non-verifiable individual measures. The optimal contract can be interpreted as an explicit contract that specifies a minimum bonus pool as a function of the verifiable measure and an implicit contract that gives...

Integrated ownership is often seen as a way to foster specific investments. However, even in integrated firms, managers invest to maximize their compensation, which is chiefly driven by divisional income. Thus it is not clear that integration has any effect on investments in a world of...