Using U.S. states' staggered enactment of majority voting legislation (MVL) as plausibly negative exogenous shocks to director job security, we find an increase in the unconditional likelihood of forced CEO turnover and the sensitivity of forced CEO turnover to firm performance following its...

Using exogenous variation in CEO stock option grants generated by FAS 123R which mandated expensing of employee stock options, we investigate the causal effects of CEO risk incentives (vega) on cash policies of U.S. firms. Employing a difference-in-difference framework, in which we identify...

This paper investigates whether employee stock option proceeds, both executive and non-executive are employed by firms to finance investment by exploiting a quasi-natural experiment which mandated option expensing, SFAS 123R. We find that despite a fall in both executive and non-executive option...

This paper analyzes how board independence affects a board's monitoring intensity and the CEO pay disparity. We consider a corporate tournament model with a novel feature that the board of directors may lack independence. This has significant implications for a board's monitoring and rewarding...

This paper analyzes the optimal production and hedging decisions of a competitive firm holding optimism and pessimism under price ambiguity. We show that the separation theorem remains intact as the firm's optimal output level depends neither on the output price distribution nor on the firm's...

This paper analyzes how CEO turnover affects successive CEOs' financial reporting decisions and the capital market price. I show that when an outgoing CEO (O) in period 1 is succeeded by an incoming CEO (N) in period 2, strategic interaction between O and N leads to interlinked earnings reports....

This paper analyzes how ambiguity affects the tournament outcome and the project selection of a multi-business-unit organization. We consider a tournament model where business unit managers compete against each other for a promotion reward but are ambiguous about how relatively well their skills...

Motivated by psychological evidence that self-esteem plays an important role in individual decision-making, this paper studies how self-esteem concerns influence a manager's effort choice and hedging behavior and how a board designs the managerial compensation in response. We show that when the...

How does product market competition influence whether CEOs with greater or lower levels of overconfidence are hired and whether CEOs overinvest in innovation? In a Cournot model in which firms hire a CEO to take charge of research and development (R&D) investment and production decisions, this...