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When there is uncertainty about a CEO's quality, news about the firm causes rational investors to update their expectation of the firm's profitability for two reasons: Updates occur because of the direct effect of the news, and also because the news can cause an updated assessment of the CEO's...
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This study reports that changes in compensation from performance-sensitive (commission-based) to less performance-sensitive (base salary plus commission) schemes hurt employee performance but do not impair the company's. We analyzed performance data for 4,392 employees and 87 branches of a major...
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