Research Conversation with Finance PhD Alum Jared Wilson

What mechanisms effectively align the interests of corporate managers and directors with those of shareholders?

My research focuses on examining ways in which we incentivize managers and directors to work in the best interests of shareholders. Furthermore, I investigate the effectiveness of these internal and external control mechanisms (e.g. executive compensation, threat of replacement) in maximizing shareholder wealth. For example, the threat that the board of directors may fire the CEO acts as a way to push managers to work in the best interests of shareholders. In this case, I examine factors that influence the firing decision and the outcomes for shareholders.

My research is useful for shareholders of public firms, including institutional and retail investors, as well as managers and directors of public firms. My research’s ultimate goal is to suggest best governance practices for firms and their shareholders to implement in order to maximize firm value.