Prior research finds that firms tend to select external CEO hires from companies with superior past performance and that this past performance is associated with a compensation premium in the hiring firm. We test whether this pay premium is associated with future performance in the hiring firm....

This paper uses a two-step methodology to examine the relationship between managerial cost inefficiency and the takeover of U.S. thrifts during a period of market liberalization and widespread takeover activity, 1994 to 2000. In the first stage using stochastic cost frontiers, controllable...