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Research

Working Papers

Executive Compensation: The Trend Toward One Size Fits All     
WFA Trefftzs Award for Best Paper
Presentations: WFA (2021), SFS Cavalcade (2021), MFA (2021), FOM (2020)

 

I report a "one-size-fits-all" trend in the structure of executive compensation plans. The distribution of compensation across pay components —salary, bonus, stock awards, options, non-equity incentives, pensions, and perquisites— has become more similar since 2006. 24% of the variation across firms disappeared in the last thirteen years. Using panel data regressions and plausibly
exogenous shocks, I find that institutional investors' influence on management decisions and proxy advisors' recommendations are salient sources of this standardization. Finally, I find evidence suggesting that uniformity might come at the expense of optimal incentives, as increases in compensation similarity translate into lower shareholder value.

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Leaky Director Networks and Innovation Herding   (with Gerard Hoberg)
Presentations: AFA (2023, scheduled), SFA (2022), FMCG (2022)

This paper examines the role of overlapping director networks on firm innovation, technology diffusion, market structure, and performance.  First, we document that, despite potential legal issues, overlapping directors are surprisingly most prevalent among direct competitor firm-pairs. Using panel data regressions with rigid controls and plausibly exogenous shocks, we find that competing firms in markets with dense director overlaps experience innovation herding, losses in product differentiation, and they ultimately perform poorly.  Novel network propagation tests of individual technologies show that intellectual property leakage plays a role as firms with dense overlapping director networks experience faster propagation of technologies to their competitors.  Our results are most consistent with a new agency conflict, as directors can realize better career outcomes by leaking, even though a consequence can be value destruction for shareholders.

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The Effect of Mandatory Information Disclosure on Financial Constraints
Presentations: AFA (2019), Trans-Atlantic Doctoral Conference (2019)

This paper examines the effects of mandatory disclosure on firms' financial constraints and investment policies. I study a regulatory reform requiring firms of a certain size to file a standard 10K instead of choosing between the standard form and an abbreviated 10K. Companies that voluntarily used the standard 10K form before the reform become less debt-constrained, issue more debt and increase their investment. The findings are consistent with mandatory disclosure providing a commitment device for future disclosure that reduces the agency cost of debt.

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