Managerial Attitudes and Corporate Actions

Managerial Optimism and Corporate Finance

Transparency, Risk, and Managerial Actions

I investigate the relation between firm risk and firm transparency over the period 1992-2006 and find that the level of firm transparency and the level of firm risk are negatively related. I also find that higher CEO pay-performance sensitivity (delta) works to mitigate this inverse relationship. This result is consistent with Hermalin and Weisbach (2007) who suggest that managers reduce risk t...

Corporate Payout Policy and Managerial Stock Incentives*

We examine how corporate payout policy is affected by managerial stock incentives using data on more than 1100 nonfinancial firms during 1993-97. We find that management share ownership encourages higher payouts by firms with potentially the greatest agency problems—those with low market-to-book ratios and low management stock ownership. We also find that management stock options change the com...

Corporate Restructuring, Downsizing and Managerial Compensation

There is common consensus that managerial compensation is strongly tied to rm size and much less so to nancial performance. One suspects that observed restructuring and downsizing in corporations in recent years may have an eeect on these results. Based on multi-task theoretical considerations, our evidence for German industrial rms shows that pay for rm size elasticities decrease only for larg...

Limited managerial attention and corporate aging

As firms have more assets in place, more of management’s limited attention is focused on managing assets in place rather than developing new growth options. Consequently, as firms grow older, they have fewer growth options and a lower ability to generate new growth options. This simple theory predicts that Tobin’s q falls with age. Further, competition in the product market is expected to slow ...