Incentives

Independent Director Incentives: Where do Talented Directors Spend Their Limited Time and Energy?

We study reputation incentives in the director labor market and find that directors with multiple directorships distribute their effort unequally...

Incentives and Outcomes: China's Environmental Policy

China?s record-breaking economic growth is evoking increasing concern about unaddressed environmental problems. We show that, while city...

Are CEOS Paid Extra for Riskier Pay Packages?

This paper estimates the pay premium from CEO incentive compensation. Using detailed U.S. CEO contract compensation data and simulation analysis, we...

Bank CEO Incentives and the Credit Crisis

How Important are Risk-Taking Incentives in Executive Compensation?

We consider a model in which shareholders provide a risk-averse CEO with risk-taking incentives in addition to effort incentives. We show that the...

How Important is Moral Hazard for Distressed Banks?

The moral hazard incentives of the bank safety net predict that distressed banks take on more risk and higher leverage. Since many factors reduce these...

The Mess at Morgan: Risk, Incentives and Shareholder Empowerment

The financial crisis of 2008 focused increasing attention on corporate America and, in particular, the risk-taking behavior of large financial...

Governance through Shame and Aspiration: Index Creation and Corporate Behavior

After decades of de-prioritizing shareholders' economic interests and low corporate profitability, Japan introduced the JPX-Nikkei400 in 2014. The...

Despite claims that CEO compensation contracts are increasingly complex, little is known about the extent to which they are, what drives that...

Does the Stock Market Harm Investment Incentives?

A Survey of Recent Evidence on Boards of Directors and CEO Incentives

This article surveys the recent literature on boards of directors and the interplay between director incentives and CEO incentives. The primary focus...

Governance, Risk Management, and Risk-Taking in Banks

This paper examines how governance and risk management affect risk-taking in banks. It distinguishes between good risks, which are risks that have an ex...