How Twitter Pushed Stakeholders Under The Bus

This study focusses on the acquisition of Twitter by Elon Musk. Our analysis indicates that when negotiating the sale of their company to Musk,...

Competing Views on the Economic Structure of Corporate Law

Written for a symposium issue celebrating the thirty-year anniversary of the publication of The Economic Structure of Corporate Law by Frank...

Shareholderism versus Stakeholderism – A Misconceived Contradiction. A Comment on “The Illusory Promise of Stakeholder Governance” by Lucian Bebchuk and Roberto Tallarita

This paper critiques an assessment by Bebchuk and Tallarita (BT) of the relative merits of shareholder and stakeholder governance. BT’s paper argues...

The Origins of the German Corporation - Finance, Ownership and Control

The Perils of Small-Minority Controllers

This Article contributes to the long-standing and heated debate over dual-class companies by placing a spotlight on a significant set of dual-class...

Ownership: Evolution and Regulation

This paper is the first study of long-run evolution of investor protection and corporate ownership in the U.K. over the 20th century. Formal investor...

Will Corporations Deliver Value to All Stakeholders?

Supporters of stakeholder governance advocate relying on corporate leaders to use their discretion to protect stakeholders, and they seem to take...

The Perils and Questionable Promise of ESG-Based Compensation

With the rising support for stakeholder capitalism and at the urging of its advocates, companies have been increasingly using environmental, social,...

A Lesson from Startups: Contracting Out of Shareholder Appraisal

Appraisal is a controversial topic. Policymakers have debated the goals served by the appraisal remedy, and legislatures have repeatedly revised...

Shareholder Collaboration

Two models of the firm dominate corporate law. Under the managementpower model, decision-making power rests primarily with corporate insiders...

Purpose Proposals

Repurposing the corporation is the hot issue in corporate governance. Commentators, investors and increasingly issuers, maintain that corporations...

What’s in a Name? ESG Mutual Funds and the SEC’s Names Rule

As investor money flows into environmental, social and governance (ESG) mutual funds, regulators have raised growing concerns about greenwashing –...

Centros, California’s “Women on Boards” Statute and the Scope of Regulatory Competition

In its 1999 Centros decision, the European Court of Justice affirmed that the EU right of establishment protects a corporation’s right to select a...

Extending Dual Class Stock: A Proposal

The increasing use of dual class voting structures in public companies, and the frequency with which such structures contain sunset provisions, raises...

Dual Class Stock

This chapter examines dual class common stock. Dual class stock has evolved from a vehicle used largely by insiders in family owned and media companies to...

Promoting Corporate Diversity: The Uncertain Role of Institutional Investors

Two developments are having an impact on corporate decisions. One is the increased engagement by institutional intermediaries, and a shift in the focus...

Trust, Social Capital, and the Bond Market Benefits of ESG Performance

We investigate whether a firm’s social capital, and the trust that it engenders, are viewed favorably by bondholders. Using firms’ environmental...

Do Foreigners Invest Less in Poorly Governed Firms?

Private Benefits of Control, Ownership, and the Cross-Listing Decision

This paper investigates how a foreign firm's decision to cross-list on a U.S. stock exchange is related to the consumption of private benefits of control...

International Evidence on Cash Holdings and Expected Managerial Agency Problems

This paper uses managerial control rights data for over 5000 firms from 31 countries to examine the net costs and benefits of cash holdings. We find that...

Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis

We study the extent to which a firm's social capital, as measured by the intensity of a firm's corporate social responsibility (CSR) activities, affects...

Sexism, Culture, and Firm Value: Evidence from the Harvey Weinstein Scandal and the #MeToo Movement

During the revelation of the Harvey Weinstein scandal and the subsequent re-emergence of the #MeToo movement, firms with a non-sexist corporate...

Political Influence, Bank Capital, and Credit Allocation

Political influence on bank credit allocation is often viewed as being necessary to address social problems like income inequality. We hypothesize...

Investor Heterogeneity, Investor-Management Disagreement, and Share Repurchases

This paper develops and tests a new theoretical explanation for why a firm conducts open-market and privately-negotiated stock repurchases....

The Carrot and the Stick: Bank Bailouts and the Disciplining Role of Board Appointments

This paper empirically examines the Capital Purchase program (CPP) under TARP that was used by the U.S. government to bail out distressed banks with...

The Dark Side of Liquidity Creation: Leverage and Systemic Risk

We consider a model in which the threat of bank liquidations by creditors as well as equity-based compensation incentives both discipline bankers, but...

How are Bankers Paid?

We empirically examine bank CEOs’ compensation. We find that bank CEOs (a) are paid less than their nonfinancial counterparts, an effect driven...

Personal and Organizational Higher Purpose, Corporate Governance and Shareholder Value: Survey Results

This paper reports the findings of a recent survey of 1019 individuals to learn about their commitment to and perceived value from personal and...

Bank Capital and Financial Stability: An Economic Tradeoff or a Faustian Bargain?

Financial crises impose large and persistent social costs, making banking stability an important regulatory goal. This paper provides a review of the...

Post-Crisis Corporate Culture and Governance in Banking

This paper provides a brief assessment of how ethics, culture and corporate governance have evolved in banking since the financial crisis. It concludes...

Delegation Chains

We ask why we observe multiple layers of decision-making in fund management with investors, sponsors, fund managers, and consultants, even if...

Post-merger Restructuring of the Labor Force

We study the restructuring of the labor force after M&As by taking a comprehensive view that analyzes targets, acquirers, and merged firms. We show...

Private Equity and Human Capital Risk

We study the human-capital effects of private equity buyouts in Germany. We conduct matched-sample difference-in-differences estimations at the...

Lower Salaries and No Options: The Optimal Structure of Executive Pay

We estimate a standard principal agent model with constant relative risk aversion and lognormal stock prices for a sample of 598 US CEOs. The model is...

Labor Representation in Governance as an Insurance Mechanism

We hypothesize that labor participation in governance helps improve risk sharing between employees and employers. It provides an ex-post mechanism to...

Private Equity Buyouts and Employee Health

We relate employees' health to their productivity to analyze the restructuring of the labor force during Private Equity buyouts using employee-level...

Pride and Prestige: Why Some Firms Pay Their CEOs Less

Bankers on the Boards of German Firms: What they do, what they are worth, and why they are (still) there

Relative Performance Evaluation in CEO Compensation: A Talent-Retention Explanation

Relative performance evaluation (RPE) in CEO compensation can be used as a commitment device to pay CEOs for their revealed relative talent. We find...

The Limits of Limited Liability: Evidence from Industrial Pollution

We study how parent liability for subsidiaries’ environmental cleanup costs affects industrial pollution and production. Our empirical setting...

Noisy Factors

The Fama-French factors are ubiquitous in empirical finance. We find that factor returns differ substantially depending on when the data were...

Minimizing Costs, Maximizing Sustainability

Do strong incentives to cut costs lead firms to neglect negative externalities? We find that costcutting incentives can be environmentally friendly....

Good Monitoring, Bad Monitoring

Are courts effective monitors of corporate decisions? In a controversial landmark case, the Delaware Supreme Court held directors personally liable...

International Evidence on Firm Level Decisions in Response to the Crisis: Shareholders vs. Other Stakeholders

The relationship between changes in GDP and unemployment during the 2008 financial crisis differed significantly from previous experiences and...

Benchmarking of Pay Components in CEO Compensation Design

We document an important element of CEO compensation design – benchmarking of the pay components. Analyzing a panel of CEO compensation data...

The Costs and Benefits of Performance Fees in Mutual Funds

Funds with performance fees have annual net risk-adjusted returns of 0.50% below other funds, a result mostly due to funds without a stochastic...

Firm-level Climate Change Exposure

We develop a method that identifies the attention paid by earnings call participants to firms' climate change exposures. The method adapts a machine...

Climate Risk Disclosure and Institutional Investors

Employing disclosure theory, we develop hypotheses regarding the preferences of institutional investors with respect to firms’ climate risk...

Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis

We study the extent to which a firm's social capital, as measured by the intensity of a firm's corporate social responsibility (CSR) activities, affects...

The Importance of Climate Risks for Institutional Investors

According to our survey about climate risk perceptions, institutional investors believe climate risks have financial implications for their...

Institutional Investors and Corporate Governance

We provide a comprehensive overview of the role of institutional investors in corporate governance with three main components. First, we establish...

Portfolio Manager Ownership and Fund Performance

Do Consumers Care About ESG? Evidence from Barcode-Level Sales Data

Using granular barcode-level sales data from retail stores, we show that environmental and social (E&S) ratings are positively related to local...

"Since You're So Rich, You Must Be Really Smart": Talent and the Finance Wage Premium

Financial sector wages increased extraordinarily over the last decades. An explanation for this trend is that skill demand rose more in finance than...

The Effect of Carbon Pricing on Firm Emissions: Evidence from the Swedish CO2 Tax

Sweden was one of the first countries to introduce a carbon tax in 1991. We assemble a unique dataset tracking CO2 emissions from Swedish manufacturing...

Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts

Private equity funds pay particular attention to capital structure when executing leveraged buyouts, creating an interesting setting for examining...

Private Equity and the Resolution of Financial Distress

We examine the role private equity (PE) firms play in the resolution of financial distress using a sample of 2,151 firms that borrow in the leveraged loan...

Fiduciary Duties and Equity-Debtholder Conflicts

We use an important legal event as a natural experiment to examine the effect of management fiduciary duties on equity-debt conflicts. A 1991 Delaware...

Performance and Behavior of Family Firms: Evidence From the French Stock Market

Private Sanctions

We survey a representative sample of the U.S. population to understand stakeholders’ desire to see their firms exit Russia after the invasion of...

Investor Ideology

We estimate institutional investor preferences from proxy voting records. The W-NOMINATE method maps investors onto a left-right dimension based on...