This paper provides new evidence on the relationship between managerial incentives and firm risk using a hand-collected database of 3307 executive year observations. We find that the relation between pay performance sensitivity and firm risk exhibits a nonlinear relationship with firm size: for...

We value UK executive stock options (ESOs) as American options that are awarded conditional on the probability of the holders achieving some performance criteria. Unlike the standard Black and Scholes (BS) model, which is universally used both in the literature and practice, this provides a more...

This paper examines the executive compensation practices of listed UK retailing companies. We compare New Economy retailers (e-commerce and dot.coms) to more traditional retailers operating in the quot;Old Economyquot;. We also discriminate between recently floated retailers and their more...

This paper provides evidence on the level and composition of the pay of the top executives of a sample of UK Public Listed Companies. The study uses hand collected data on the compensation for 698 CEO years and 2609 other-executive years over the period 1995-2000. In order to focus on the...

This paper examines the executive compensation practices of listed U.K. retailing companies. We compare New Economy retailers (e-commerce/dot.coms) to more traditional retailers operating in the Old Economy. We also discriminate between recently floated retailers and their more seasoned...

Firms differ in their dependence on skilled labor and face labor adjustment costs that increase with their workers' skill level. We show that firms with a higher share of skilled workers, and thus less flexibility to adjust their labor demand in response to cash flow shocks, hold more...

Labor unionization has no causal effect on firm risk. Using a regression discontinuity design to study the impact of labor union elections on option-implied firm risk, we find that unionization per se does not affect investor perceptions about a firm's price, tail, or variance risk. This finding...

We document that analysts cater to short-term investors by issuing optimistic target prices. Catering dominates among analysts at brokers without an investment banking arm as they face lower reputational cost. The market does not see through the analyst catering activity and their forecasts lead...

This study examines the effects of political uncertainty around US presidential elections on firm risk, expected return, trading activity, and dispersion of investor beliefs. To this end, we utilize information embedded in short-term options and exploit cross-sectional differences in firms'...

Shareholder investment horizons have a significant impact on Say-on-Pay voting patterns. Short-term investors are more likely to avoid expressing opinion on executive pay proposals by casting an abstaining vote. They vote against board proposals on pay only in cases where the CEO already...