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Kelley School of Business Indiana University Bloomington
The Institute for Corporate Governance

“Incentives and Promotions”, featuring Kelly Shue

Posted on by Finance Department

On May 2, 2024, presenter Kelly Shue discussed “Incentives and Promotions”. The lecture was moderated by Mila Sherman.

 

Kelly answers attendee questions in the above video and a few more below:

[1] Why do firm continue to earn significant profits if the Peter principle is so deterimental? Is the PP good for profits but bad for employees?

Promoting the best worker is not necessarily a mistake on the part of firms. While we show that promoting based on past performance has significant costs, there are also significant benefits in terms of motivating workers to exert effort and invest in firm specific human capital.

[2] Could it be that potential is assessed at a time when participants often have young children, which can lead to lower assessed potential especially for women who are usually more involved in child rearing at the time when their “potential” is assessed. If possible, it would be helpful to look at men and women without children to figure out if this effect is (partly) driving the results. Is this captured by your “demographics” controls? This would be consistent with recent studies of the gender pay gap which find no gender gap straight out of school (say law school) but a widening gap later on.

Please see our draft, which includes a careful breakdown of gaps by age. We think there definitely could be a child care component. However, we continue to see a large gap in assessments of potential and promotions even among older workers who are unlikely to be caring for young children, and for promotions that don’t require relocation or a large increase in responsibilities.

Publicly accessible versions of the research Kelly presented can be found here with detailed discussions and analysis of many of the topics raised in the Q&A.

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The Governance of Certification Agents, featuring Jess Cornaggia

Posted on by Finance Department

On February 1, 2024, presenter Jess Cornaggia discussed “The Governance of Certification Agents”. The lecture was moderated by Christoph Schiller.

Jess’ slides from the lecture can be found here and the Q&A can be found below.

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CEO Markets: Public vs Private Firms, featuring Dirk Jenter & Steven Kaplan

Posted on by Finance Department

On September 14, 2023, Kelley ICG held our first Fireside Chat. Presenters Dirk Jenter & Steven Kaplan discussed “CEO Markets: Public vs Private firms” The chat was moderated by Jun Yang.

Slides from this lecture can be found here.
A brief Q&A with Steve and Dirk can be found below. (more…)

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