Alex Edmans

Professor of Finance, London Business School

CEPR Research Fellow
ECGI Research Associate

@aedmans

Latest Academic Papers

Oct 17: The Source of Information in Prices and Investment-Price Sensitivity published in the Journal of Financial Economics.  Managers learn from prices to guide their investment decisions – financial markets matter for the real economy. But value of financial markets depends not on the total amount of information in prices, but where this information comes from.

Sept 17The Long-Term Consequences of Short-Term Incentives. Vesting equity is associated with a higher likelihood of M&A and share repurchases, and higher short-term returns but lower long-term returns to these actions.

July 17Executive Compensation: A Survey of Theory and Evidence. New survey paper on executive compensation, containing (1) Data on CEO and other top executive pay over time and across firms, including private firms and non-US firms. (2) Critical analysis of three explanations for the drivers of pay: shareholder value maximization (including a simple unifying model), rent extraction, institutional influences. (3) The “effects” of executive pay and challenges in causal identification. (4) Directions for future research.

July 17: Does Improved Information Improve Incentives? forthcoming in the Journal of Financial Economics.  Optimal contracting model showing that improved precision of the performance measure may reduce the agent’s incentives, offsetting the benefits of information typically documented in the literature.

July 17: Equity Vesting and Investment published in the Review of Financial Studies. CEOs cut investment when their equity vests, due to concerns with the short-term stock price.

Dec 16: Blockholders: A Survey of Theory and Evidence. Survey paper for the Handbook of the Economics of Corporate Governance on: underlying property rights of public firms and role of blockholders; definition of a blockholder; new evidence on frequency and characteristics of blockholders; simple model unifying theories of voice and exit; review of empirical studies; future research directions.

Corporate Governance Reform (incl. UK Government Inquiry)

The Case for Stock Buybacks (Harvard Business Review)
The Answer to Short-Termism Isn’t Asking Investors to Be Patient (Harvard Business Review)

Response to government’s Green Paper on Corporate Governance

Written evidence on CEO pay, workers on boards, shareholder vs. stakeholder maximisation

Oral testimony in House of Commons, 15 November 2016 (transcript)

Supplementary written evidence: short-term trading, dividends and repurchases are not bad for society; further evidence on workers on boards

Executive Compensation Reform

Compilation of non-technical, practitioner article on executive pay

Letter to SEC on why they should not force pay ratio disclosure

Why We Need to Stop Obsessing Over CEO Pay Ratios (Harvard Business Review)

Link Executive Pay to Wider Societal Benefits (FT Op-Ed)

Stop Making CEO Pay A Political Issue (Harvard Business Review)

Performance-Based Pay For Executives Still Works (Harvard Business Review)

The Purposeful Company

Corporate Governance Green Paper is a Call to Arms: FT Op-Ed

Policy Report proposing reform to executive pay, blockholders, company law, accounting, the investment industry, and early-stage financing to embed purpose into companies. Brief summary

Executive Pay Report. Evidence-based proposals to reform executive pay. Brief summary

Brexit

The Case For Brexit

The Case For Remain

The Rational Response to Brexit

The UK’s Brexit Options: Single Market, Customs Union, Free Trade Agreement explained

TEDx Talk, From Post-Truth to Pro-Truth

TEDx Talk, The Social Responsibility of Business