New book: Grow the Pie: How Great Companies Deliver Both Purpose and Profit (order link). FT Business Books of the Year, 2020; FT/ISFFC Award for Excellence in Sustainable Finance Education, 2021
– Korean translation (published as “ESG 파이코노믹스”)

Sept 21: The Long-Term Consequences of Short-Term Incentives forthcoming in Journal of Accounting Research. 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.

Jul 21: Music Sentiment and Stock Returns Around the World forthcoming in Journal of Financial Economics. We introduces a real-time, continuous measure of national sentiment – the positivity of songs that citizens listen to – and link it to abnormal stock returns (which subsequently reverse), volatility, and mutual fund flows.

Jul 21: New paper, When Is (Performance-Sensitive) Debt Optimal? Existing theories of debt assume output is the only contractible performance measure available. We show that debt continues to be optimal when the firm has access to other performance signals – and how these signals should affect the debt repayment, leading to performance-sensitive debt.

Jun 21: New paper, CEO Compensation: Evidence From the Field. We survey directors and investors on how they set CEO pay in practice, revealing a number of departures from mainstream academic models.

Jan 21: How Should Performance Signals Affect Contracts? forthcoming in Review of Financial Studies. The informativeness principle demonstrates that a contract should depend on informative signals. This paper studies how they should do so.

March 20: The Long-Term Consequences of Short-Term Incentives (updated). The imminent vesting of equity causes CEOs to undertake repurchases and M&A that destroy long-term value.

July 19: Governance Under Common Ownership published in Review of Financial Studies. Common ownership can improve corporate governance, rather than leading to anti-competitive behavior.

July 19: Financing Through Asset Sales published in Management Science.

Jan 19: The Informativeness Principle Without The First-Order Approach published in Games and Economic Behavior.

Nov 18: Strategic News Releases in Equity Vesting Months. Lead article in Review of Financial Studies. CEOs strategically reallocate news releases to coincide with months in which their equity is vesting.

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.

July 17: Executive 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: 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.