New Academic Papers:
November 14: New paper, The Generalized Informativeness Principle. We show that the informativeness principle does not hold if the first-order approach is invalid. We derive a "generalized informativeness principle" that holds generically, even if the first-order approach is invalid.
September 14: Major rewrite of The Value of Informativeness for Contracting. The informativeness principle shows that greater signal precision increases contracting efficiency. We show that it may weaken incentives, potentially justifying pay-for-luck.
August 14: New paper, Strategic News Releases in Equity Vesting Months. CEOs time corporate news releases to coincide with months in which their equity vests. These releases temporarily boost stock prices and market liquidity, which the CEO takes advantage of by cashing out shortly after. Financial Times, Bloomberg TV, Barrons coverage.
August 14: New paper, The Informativeness Principle Under Limited Liability. The informativeness principle does not automatically extend to settings with limited liability: even an informative signal may have zero value for contracting. We derive new conditions for signals to have value under limited liability.
August 14: New paper, Governance and Comovement Under Common Ownership. Governance can be stronger when investors are "spread thinly" and own blocks in multiple firms. Selling one firm and retaining others is a powerful signal of underperformance, disciplining the manager ex ante.
July 14: Final version of survey paper on Blockholders and Corporate Governance, for Annual Review of Financial Economics. Covers theoretical and empirical literature on both "voice" and "exit".
July 14: New paper, Employee Satisfaction, Labor Market Flexibility, and Stock Returns Around The World. Companies with high employee satisfaction outperform, but only in countries with high labor market flexibility. Institutional context is key to SRI. VoxEU summary, Knowledge@Wharton coverage
October 12: Survey paper on The Real Effects of Financial Markets, at the intersection of asset pricing and corporate finance, in the Annual Review of Financial Economics.
New Policy Pieces:
December 14: Shareholder activism in action: reforming the corporate governance of a firm that pursued short-term gain at the expense of long-term value.
November 14: How Should CEOs Be Paid?, article for the World Economic Forum.
August 14: Why Doing Good By Your Employees Boost Stock Performance. Opinion piece in CityAM.
August 14: The Secrets of Time Management. Article in CityAM.
May 14: How Executive Pay Regulations Can Increase Inequality - Not Reduce It. Opinion piece in CityAM.
May 14: Pay Bosses in Debt - Not Just Equity - To Deter Future Crisis. Opinion piece in CityAM.
February 14: Does Social Responsibility Improve Corporate Value?, article for the World Economic Forum.