We examine whether boards are sufficiently well-informed to make efficient decisions on CEO compensation. In order to mitigate the endogeneity of board decision on CEO compensation, we use mutual fund flow-driven trading pressure as an exogenous shock to stock price informativeness. Consistent...

By examining board appointments of outside directors who have previously fired a CEO, we study how directors' intolerance of failure influences firm performance and risk-taking. Such directors appear to benefit firms with weak monitoring, but hurt firms in innovative industries. Firms appointing...

We examine how boards decide on CEO compensation depending on how informative stock prices are. In order to mitigate the endogeneity of board decisions, we use extreme mutual fund flow-driven trading pressure as an exogenous shock to stock price informativeness. Consistent with informed boards...