Research Summary

Non-Financial Incentives



My research shows how firms combine many facets of internal governance to motivate managers. A perspective that underlies much of my research is that managers are not motivated by financial rewards alone: “it’s not just about the money.” Armed with this perspective, I have investigated compensation design in conjunction with other governance aspects that managers care about. For example, I study perquisites that increase managerial productivity or enhance status (e.g., corporate jets and chauffer services); location decisions that acknowledge social factors (i.e., managerial concern for employee welfare and visibility in the community); the effect of peer comparisons in the setting of executive pay; decision rights or “the right to be the boss” in mergers and acquisitions; the size of divisional investment budgets in internal capital markets; and the position in the organizational hierarchy. Taken together, these papers provide compelling evidence of the importance of non-financial rewards in motivating managers.

I.  Perquisites, Social Factors & Geography, Peer Comparison

Are Perks Purely Managerial Excess?  [Written with Raghuram G. Rajan], Journal of Financial Economics 79, no. 1 (January 2006): 1-33.  (Winner of Second Place 2006 Jensen Prize for "Best Paper on Corporate Finance and Organizations" presented by Journal of Financial Economics .)  Journal Article in pdf format.

Trade-offs in Staying Close: Corporate Decision Making and Geographic Dispersion
[Written with Augustin Landier and Vinay Nair],
 Review of Financial Studies Vol. 22 No.3 (March 2009): 1119-1148.  Journal Article in pdf format.

Pay Harmony: Peer Comparison and Executive Compensation, [Written with Claudine Gartenberg], Harvard Business School Working Paper #13-041 (March 2016). Working Paper in pdf format.

II.  Decision Rights in M&A (or "the right to be the boss")

How Do Acquirers Retain Successful Target CEOs? The Role of Governance, [Written with Harbir Singh],Management Science,  57, no. 12 (December 2011): 2011-2114.  Journal Article in pdf format.

Do CEOs in Mergers Trade Power for Premium? Evidence from 'Mergers of Equals', Journal of Law, Economics and Organization,  20, no. 1 (April 2004): 60-101. Journal Article in pdf format.