Discussion of 'Are CEOs Compensated for Value Destroying Growth in Earnings?'
8 Pages Posted: 5 Jan 2010 Last revised: 13 Sep 2010
Date Written: March 4, 2010
This discussion provides several explanations for the evidence presented in Balachandran and Mohanram (2010) that are consistent with efficient contracting. I also show that - contrary to the suggestion of the title - CEOs do not benefit from value destroying growth in earnings. Finally, I argue that there is no conclusive evidence that corporate investments destroy value.
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