This paper investigates the effect of superstar CEOs on their competitors. Exploiting shocks to CEO status due to prestigious media awards, we document a significant positive stock market performance of competitors of superstar CEOs subsequent to the award. The effect is more pronounced for...

We analyze factors driving exercise price policy for executive option plans (ESOPs), and their scope, in a country where firms are not subject to such tax and accounting considerations, that have seemed to led to a dominance of at-the-money options in the U.S. Our “unbounded” data for...

We simultaneously analyze two mechanisms of the managerial labor market (CEO turnover and remuneration schemes) in two different regulatory regimes, namely before and after the sweeping governance reforms adopted in the UK in the 1990s. We employ sample selection models to examine firms in a...

Several recent studies provide evidence that dual class firms are discounted compared to similar single class companies due to the extraction of private benefits and agency costs. However, the channels through which private benefits are extracted have not been fully explored in the literature....

Financial strategy is about how companies raise funds and manage them within their organizations. Corporate governance is relevant to both of these aspects, and an understanding of corporate governance is vital for an appreciation of corporate finance. This chapter from Corporate Financial...

Purpose: This study explores the probability of expropriation of minority shareholders by controlling shareholders in the form of CEO compensation under an imperfect governance institution by using a novel Chinese dataset over 2001-2010.Design/methodology/approach: We use a direct method to...

This chapter investigates the theoretical frameworks and recent empirical evidence of executive compensation in emerging markets. The author outlines the theoretical evolutions and identifies the unique aspects of institutional features in determining the pay scheme in emerging markets. Due to...

An important gap exists in modern finance theory on the impact of labour market frictions on corporate debt policy. Unemployment risk is a considerable issue for workers but despite this, workers' unemployment costs are largely absent from corporate financial theories which typically do not...

This paper studies how firms tie CEO compensation to firms' stock market performance. I demonstrate that in theory and in practice there is a tradeoff between giving CEOs incentives and forcing them to hold an un-diversified position in the firm. Unlike the results of the existing literature,...

We examine a sample of firms that adopt quot;target ownership plans,quot; under which managers are required to own a minimum amount of stock. We find that prior to plan adoption, such firms exhibit low managerial equity ownership and low stock price performance. Managerial equity ownership...