Research

Working Papers

The Bright Side of Waiving Loyalty: Corporate Opportunity Waivers and Firm Misconduct (Job Market Paper) (with Shawn Mobbs)

Abstract: Corporate Opportunity Waiver (COW) laws allow boards to waive the strict fiduciary duty of loyalty. While agency theory suggests this could exacerbate governance failures, we document the opposite effect. Using a stacked difference-in-differences design, we find that COW adoption significantly reduces the probability, frequency, and severity of corporate misconduct. We validate a human capital mechanism: by removing legal frictions, COWs enable incumbent directors to serve on external boards and acquire valuable compliance expertise. This learning effect is strongest when directors join same-industry peers or firms with superior compliance records. Conversely, the benefit reverses when directors join significantly larger firms, suggesting excessive external demands distract from focal-firm monitoring. Cross-sectional tests reveal these governance benefits are maximized in high-violation environments and firms initially lacking external board experience. Crucially, this disciplining effect is attenuated by CEO entrenchment but amplified by strong institutional ownership. Ultimately, legal flexibility in fiduciary duties can enhance corporate governance by upgrading board human capital.

Presentations: FMA (2026, scheduled), SFA (2026, scheduled)

Tournament Incentives and Workplace Safety (with Shawn Mobbs)

Abstract: We examine the impact of CEO tournament incentives, measured by the compensation gap between the CEO and the median compensation of senior executives, on workplace safety. We find that stronger tournament incentives improve workplace safety. This effect operates through two mechanisms: greater safety-related investment and a stronger corporate safety culture. The relation is more pronounced in labor-supportive environments and under greater external scrutiny, but weaker in financially constrained firms. Consistent with tournament theory, the effect is strongest when promotion prospects are higher. We also find that executives with better safety records are more likely to be promoted to CEO.

Presentations: EFA (2026)

link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7279459

Industry Tournament Incentives and Workplace Safety (with Shawn Mobbs)

Abstract: This paper examines the impact of industry tournament incentives—measured as the compensation gap between the highest-paid CEO in the industry and the focal firm’s CEO—on workplace safety. Using establishment-level data, we find robust evidence that larger industry pay gaps are associated with significantly higher workplace injury rates, indicating that tournament incentives can compromise operational safety. This finding is robust to a broad set of identification strategies, including instrumental variable analysis, matched sample, and an exogenous shock. Cross-sectional analyses reveal that this adverse effect is amplified in industries with low union presence and high CEO mobility, as well as in firms without newly appointed CEOs, and those led by younger CEOs who face stronger career progression incentives. Finally, mechanism tests document that reduced safety-related investments and increased employee workload serve as key channels through which industry tournament incentives drive higher injury rates. These findings highlight the unintended consequences of external, promotion-based compensation structures on employee well-being.

Director Job Security and the Cost of Debt (Solo-Authored)

Abstract: This paper examines how director dismissal risk affects the cost of debt. Exploiting the staggered adoption of majority voting (MV) laws, I find that MV adoption significantly increases bank loan spreads. The effect is consistent with a risktaking channel: MV adoption is associated with stronger executive risk-taking incentives, measured by top executive Vega, and greater realized cash flow volatility. Cross-sectional analyses show that the effect is weaker with greater CEO power and stronger when board monitoring is weaker or directors have greater incentives to retain their positions. Overall, the findings highlight a governance trade-off in which greater shareholder influence can intensify shareholder–creditor conflicts and increase the cost of debt.