We find that the demand for stock option positions that increase exposure to the underlying is positively related to measures of investor sentiment and past market returns, while the demand for index options is invariant to these factors. These differences in trading patterns are reflected in...

We construct a large sample of both private and public firms from a broad set of industries to provide a direct comparison of efficiency, profitability, and incentive alignment. We find that operating profit scaled by sales and net profit to sales in private firms are less than half those in...

We provide empirical evidence on how the practice of competitive benchmarking affects CEO pay. We find that the use of benchmarking is widespread, and has a significant impact on levels and changes in CEO compensation. The practice is controversial and one view is that it is inefficient because...

We test theories of managerial entrenchment and ability matching by examining the relation between CEO turnover and the level of firm diversification. Our results indicate that CEO turnover in diversified firms is completely insensitive to firm performance. Additional analysis indicates that for...

While some financial markets increasingly rely on endogenous liquidity provision by ldquo;high frequencyrdquo; traders, others also contract with ldquo;designated market makersrdquo; who commit to provide more liquidity than they would otherwise choose. We identify two reasons that such...

We document that suppliers to purely financially distressed companies that are highly likely to reorganize in bankruptcy incur little or no spillover costs. In contrast, suppliers to economically distressed firms experience large losses in market value which are linked to proxies for the cost of...

We provide empirical evidence on how the practice of competitive benchmarking affects CEO pay. We find that the use of benchmarking is widespread, and has a significant impact on levels and changes in CEO compensation. The practice is controversial and one view is that it is inefficient because...

This paper examines the strategic use of managerial compensation in an environment where a firm invests in projects which, if successful, can provide a competitive advantage over rival firms in the final product market. In particular, I study the interaction between managerial compensation...

Employee stock options (ESOs) are nontransferable and employees are generally not well diversified compared to outside shareholders. These features of ESOs imply that employee option holders may optimally exercise their options significantly early relative to what would be expected for ordinary...

We study the effect of ownership structure on firm value during the East Asian financial crisis that began in July 1997. The crisis represents a negative shock to the investment opportunities of firms in these markets that raises the incentives of controlling shareholders to expropriate minority...