As the commercial real estate market began to crash in early 1990 heavily exposed banks like Citibank and Chase Manhattan were left largely undercapitalized. John Reed, Citibank Chairman and CEO, was caught off guard by the sudden market plunge. While Reed struggled to maintain the capital...

Do horizontal wage comparisons affect firm policies on executive pay? This paper explores that question using a 1992 SEC proxy disclosure rule that mandated increased disclosure of executive pay. We argue that this rule differentially increased wage comparisons within firms with...

Performance-based pay is an important instrument to align the interests of managers with the interests of shareholders. However, recent evidence suggests that high-powered incentives also provide managers with incentives to manipulate the firm's reported earnings. The previous literature has...

We document the role of geographic dispersion on corporate decision-making. Our findings include: (i) geographically dispersed firms are less employee friendly; (ii) dismissals of divisional employees are less common in divisions located closer to corporate headquarters; and (iii) firms appear...

We document the role of geographic dispersion on corporate decision-making. First, we find that geographically dispersed firms are less employee-friendly. Second, using division-level data, employee dismissals are less common in divisions located close to corporate headquarters. Third, firms are...

I show that performance incentives vary by decision-making authority of division managers. For division managers with broader authority, i.e., those designated as corporate officers, both the sensitivity of pay to quot;globalquot; performance measures and the relative importance of...

I model inefficient resource allocations that result from influence activities by division managers in M-form organizations. Division managers distort private information about relative investment opportunities and skew capital budgets in their favor. Corporate headquarters faces a tradeoff...

I analyze CEO incentives to negotiate shared control in the post-merger governance of the surviving firm. In order to do this, I study abnormal returns in a sample of mergers of equals transactions in which the two firms are approximately equal in post-merger board representation. These...

Do multi-divisional firms structure compensation contracts for division managers to mitigate information and incentive problems in their internal capital markets? Using Compustat Segment financial data and compensation data from a proprietary survey, I find evidence that compensation and...

A widespread view is that executive perks exemplify agency problems -- they are a route through which managers misappropriate a firm's surplus. Accordingly, firms with high free cash flow, operating in industries with limited investment prospects, should offer more perks, and firms subject to...