An important question for firms in dynamic industries is how to induce a CEO to reveal information that the firm should change its strategy, in particular when a strategy change might cause his own dismissal. We show that the uniquely optimal incentive scheme from this perspective consists of options, a base wage, and severance pay. Option compensation minimizes the CEO’s expected on-the-job pa...

Executives can only impact firm outcomes if they have influence over crucial decisions. Based on this idea we develop and test the hypothesis that firms whose CEOs have more decision-making power should experience more variability in performance. Focusing primarily on the power the CEO has over the board and other top executives as a consequence of his formal position and titles, status as a fo...

Conventional wisdom suggests that CEO membership of the compensation committee is an open invitation to rent extraction by self-serving executives. However, using data from New Zealand – where CEO compensation committee membership is relatively common – we find that annual pay increments for CEOs with this apparent advantage averaged six percentage points less than those enjoyed by other CEOs d...

Overconfident CEOs over-estimate their ability to generate returns. Thus, on the margin, they undertake mergers that destroy value. They also perceive outside finance to be over-priced. We classify CEOs as overconfident when, despite their under-diversification, they hold options on company stock until expiration. We find that these CEOs are more acquisitive on average, particularly via diversi...

Abstract This study examines the voluntary disclosure of earnings forecasts by female CEOs. We find that in backdrop increased pressure to perform from investors and other stakeholders, CEOs tend issue more than male CEOs, those are accurate. also while financial analysts generally prefer follow companies headed CEOs’ efforts accurate pay off, as these help them close analyst coverage gap. prov...

As a well-studied executive bias, CEO overconfidence usually has negative connotations – although empirical evidence of its performance effects remains inconclusive. By theorizing on in turnaround situation, we propose that can either help or hinder performance, depending whether the overconfident is incumbent who steered firm into dire straits, successor hired during decline. Our findings sugg...

A decision support for forecasting of collaboration level of supply chain management (SCM) has attracted lots of important decision making in the SCM managers and chief executive officers (CEOs) However, there are no guidelines and prediction models for SCM collaboration. Therefore, the company which pursues SCM can't execute control of collaboration systematically and scientifically In this re...

This study examines the role of CEOs’ pensions and deferred compensations by exploring their impacts on pricing and non-pricing contract terms of bank loans. CEO’s inside debt, defined as the sum of defined benefit pensions and deferred compensations, pays fixed amounts at periodic intervals. We find that higher inside debt holdings significantly reduce both loan rate spreads and demands for co...

We show that firms with chief executive officers (CEOs) who gain general managerial skills over their lifetime work experience invest more in R&D and produce more patents. We address the potential endogenous CEO-firm matching bias using firmand CEOfixed effects and variation in the enforceability of non-compete agreements across states and over time during the CEO’s career. Our findings suggest...

Managerial rent extraction is a non-trivial phenomenon during acquisitions: in a sample of 364 deals from 1999-2005, over one target CEO in four experiences compensation increases due to option grants received just before the acquisition while target shareholders suffer losses. Indeed, the top quartile of rent extraction CEOs pocket an average of 19 million dollars from option awards granted se...