Working Papers

Powerful CEOs in uncertain times: survival of the fittest          PDF  SSRN  Poster 

AEA 2024 (scheduled), AFA Poster 2023, University of Oxford (Best PhD Paper Award)

In contrast to the widespread concern about excessive CEO power, this paper examines whether powerful CEOs are more beneficial and desirable under uncertainty. I document that powerful CEOs have a lower dismissal rate in uncertain times. With better performance but no increased compensation, they are likely retained optimally for their effectiveness under uncertainty rather than by entrenched power. Two mechanisms potentially explain why powerful CEOs are more effective under uncertainty: they are more willing to share information with the board, and more capable of taking swift action. My findings support optimal dismissal theory, highlighting that powerful CEOs' effectiveness increases with uncertainty.

The corporate calendar and the timing of share repurchases and equity-based compensation, with Ingolf Dittmann, Amy Yazhu Li, and Stefan Obernberger          PDF  SSRN

NFA 2023, EFA 2023, AFA 2023, SFS Cavalcade Asia-Pacific 2022, AAA 2022, DGF 2022, Erasmus University Rotterdam, University of Amsterdam, and University of Oxford

This study examines whether the CEO uses share repurchases to sell her equity grants at inflated stock prices, a concern regularly voiced in politics and media. We document that the timing of buyback programs, like the timing of equity-based compensation, is largely determined by the corporate calendar through earnings announcement dates and blackout periods, inducing a spurious positive correlation between share repurchases and equity-based compensation. Accounting for the corporate calendar, share repurchases are no longer correlated with the granting and vesting of equity. The CEO is more likely to buy equity when the firm announces a buyback program and less likely to sell equity when the firm actually buys back shares.  Equity compensation increases the CEO's propensity to launch a buyback program when it benefits long-term shareholder value. Our results suggest a novel channel of how equity-based compensation aligns the interests of shareholders with those of the CEO.