In this study, we examine the relationship between within-firm pay inequality and employee productivity. We use hand-collected data on a sample of S&P 1500 companies from 2018-2022 and find a concave relationship between the relative CEO pay and employee productivity. Consistent with tournament...

Previous studies argue that takeover targets’ CEOs can use high leverage as a signal for commitment to undertaking value-enhancing projects, thus deterring the takeover attempts since the bankruptcy risk associated with high leverage can serve as an effective governance mechanism. This paper...

We study the emergence of blockholders as an important mechanism that corrects deviations from target CEO relative debt-to-equity incentive ratios. We find that a new active blockholder more likely emerges when a firm deviates from target; deviations fall during the period the blockholder owns...

Prosocial CEOs advocate for social issues through supporting politicians representing their social values. We focus on two types of social issues: racial inequality and gun violence. Using personal charitable donation behavior to identify prosocial CEOs, we find that firms with prosocial CEOs...

This paper examines the implications of CEO overconfidence for firm distress risk and investment-related activities in the unique context of adverse incidents. I use an options‐based proxy for CEO overconfidence and study two types of adverse incidents: negative news reports and hurricanes....

We analyze the effects of CEOs' layoff risk on their risk choice while overseeing a firm. A CEO, whose managerial ability is unknown, is fired if her expected ability is below average. Her risk choice changes the informativeness of output and market's belief about her ability. She can decrease...

Organizations can use enterprise risk management disclosures to share financial and non-financial risk information with external stakeholders. Chief Executive Officer (CEO) has a key role in enterprise risk management. This study examines the relationship between Indonesian CEOs’...

We empirically test whether executives' increases in base salary when promoted to CEO result from the wage bids of competing firms (i.e., "market-based tournaments") or from the strategic choices of the firm's board of directors to elicit optimal executive incentives (i.e., "classic...

Research Question/Issue: Do large, within-firm executive pay differences hurt firm performance? Prior literature shows mixed results concerning the sign of the relationship between executive pay disparity and firm performance. This study evaluates that literature, clarifies what tournament...