This paper investigates whether being a local leader affects a firm's stock price crash risk. We find that local leadership, in terms of being a relatively large firm in a surrounding locality, decreases a firm's stock price crash risk. The results are robust to both an instrumental variable and a difference-in-differences regression approach. We also document that the impact on crash risk depends on the extent to which local communities are likely to be monitoring local firms through their stock market participation rates, the information environment surrounding these firms, and the level of industry competition. Overall, our results highlight a novel benefit of being a local leader, as it is associated with a higher level of local monitoring which renders the firm less prone to crash risk.

This study investigates whether gender pay inequality in the top management team, measured by gender pay slice (GPS), is a factor in Say on Pay (SoP) voting as required by the 2010 Dodd-Frank Act. Since CEOs are known to play a distinct role in SoP voting, we treat CEOs separately and define GPS as the fraction of total non-CEO executive compensation captured by females. Controlling for numerous factors including CEO pay and CEO gender, ISS recommendations, pay composition, firm performance, and other firm characteristics, we find robust evidence of a negative relation between non-CEO GPS and SoP votes, but this gender-based difference in SoP voting does not extend to the CEO. Taken together, our findings imply that gender equality in terms of SoP voting is still an issue for female executives at the sub-top level.

This paper examines the influence of stakeholder orientation on the shareholder-employee conflict characterized by the propensity of firms to engage in share purchases and leave employee pensions underfunded. Utilizing the enactment of US state-level constituency statutes, we find that firms in states that have adopted constituency statutes exhibit a weaker share repurchase-pension underfunding propensity, especially those with high default risk. The mechanism is through union intervention and labor representatives on boards. The effect is moderated for firms headquartered in high-social-capital regions, operating with higher human capital, possessing a history of employee litigation, and maintaining lower and short-horizon institutional ownership. After implementing constituency statutes, share repurchase announcements are associated with lower returns for firms with higher pension deficits. Our findings suggest that stakeholder orientation can discipline the shareholder-employee conflict.