Are firms' financial disclosure decisions affected by executive compensation at other firms? We find that a CEO's pay gap relative to the highest CEO pay among industry peers, defined as industry tournament incentives, can lead to distortions in corporate financial disclosures. Our analyses show...

We examine the relationship between CEO ownership and stock market performance. Firms in which the CEO voluntarily holds a considerable share of outstanding stocks outperform the market by more than 10% p.a. after controlling for traditional risk factors. The effect is most pronounced in firms...

This paper proposes to exploit a reform in legal rules of corporate governance to identify contractual incentives from the correlation of executive pay and firm performance. In particular, we refer to a major shift in the legal and institutional environment, the reform of the German joint-stock...

Following surprise independent director departures, affected firms have worse stock and operating performance, are more likely to restate earnings, face shareholder litigation, suffer from an extreme negative return event, and make worse mergers and acquisitions. The announcement returns to...

To gain insights about the quality of boards' firing decisions, we investigate abnormal stock returns and operating performance around CEO-turnover announcements in a new hand-collected sample of 208 "clean'' turnover events between January 1998 and June 2009. Unlike the majority of previous...

We examine the relationship between CEO ownership and stock market performance of S&P 500 (S&P 1500) firms from 1994-2005 (1996-2005). We find that firms in which the CEO holds a considerable share of outstanding stocks outperform the market by up to 16% p.a. after controlling for traditional...

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...