Rick Lambert

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We employ a certainty-equivalence framework to analyze the cost, value and pay/performance sensitivity of non-tradable options held by undiversified, risk-averse executives. We derive “Executive Value” lines, the risk-adjusted analogues to BlackScho9les lines. We show that distinguishing between “executive value” and “company cost” provides insight into(More)
  • Robert Bushman, Fran Ayers, +14 authors R. LEHAVY
  • 1999
In this article we present evidence that a firm’s stock price sensitivity to earnings news, as measured by outstanding stock recommendation, affects its incentives to manage earnings and, in turn, affects analysts’ ex post forecast errors. In particular, we find a tendency for firms rated a Sell (Buy) to engage more (less) frequently in extreme,(More)
We predict and find that firms use annual grants of options and restricted stock to CEOs to manage the optimal level of equity incentives. We model optimal equity incentive levels for CEOs, and use the residuals from this model to measure deviations between CEOs’ holdings of equity incentives and optimal levels. We find that grants of new incentives from(More)
Rajgopal and Kotha appreciate funding from the University of Washington. Mohan Venkatachalam appreciates funding from the Stanford University. We acknowledge Nola Jean Bamberry's editorial assistance. Abstract We contribute three important insights to the literature on the value-relevance of web traffic for Internet Business to Consumer (B2C) firms. First,(More)
Standard principal-agent models commonly invoked to explain executive pay practices do not account for the involvement of third-party intermediaries in the CEO labor market. This paper investigates the influence of one such intermediary – talent agents who seek out prospective employers and negotiate pay packages on behalf of CEOs. Jensen, Murphy and Wruck(More)
The paper investigates stock return dynamics in an environment where executives have an incentive to maximize their compensation by artificially inflating earnings. A principal-agent model with financial reporting and managerial effort is embedded in a Lucas asset-pricing model with periodic revelations of the firm’s underlying profitability. The return(More)
Rajgopal and Kotha appreciate funding from the University of Washington. Mohan Venkatachalam appreciates funding from the Stanford University. We are grateful to Tim Miller of Net Media Resources (webmergers.com) for generously providing us with the data on mergers of Internet companies. We thank an anonymous reviewer, of Amazon.com and Violina Rindova for(More)
Studies examining managerial accounting decisions postulate that executives rewarded by earnings-based bonuses select accounting procedures that Increase their compensation. The empirical results of these studies are conflicting. This paper analyzes the format of typical bonus contracts, providing a more complete characterization of their accounting(More)
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