We find that CEOs with more favorable surnames receive significantly higher compensation. The estimated effect of surname favorability is unique and incremental to the documented effects of various firm, board, and CEO characteristics. CEOs with French or German surnames receive significantly lower compensation after the French and German governments' opposition to the Iraq war. Surname favorability is not associated with corporate investments, disclosure policies, or firm performances. The results are more pronounced for professional (i.e., non-founder) or short-tenured CEOs and for firms with lower institutional ownership. Surname favorability reduces the likelihood of forced CEO turnover following poor stock performance but is not associated with a CEO's self-serving behaviors. Our results suggest that the effect of surname favorability is attributable to inefficient contracting by the board of directors. Our findings have implications for corporate stakeholders who have committed to the efficient contracting of CEO compensations.

We study how analysts' inherited cultural attitudes to time orientation affect their production of long‐term information and the profitability of their stock recommendations. We find that analysts from long‐term‐oriented cultures exhibit a longer forecast horizon and issue more long‐term forecasts. They also produce more accurate long‐term forecasts and ask more long‐term‐focused questions during conference calls, eliciting greater long‐term disclosure from managers. In addition, they are more likely to use discounted valuation models that explicitly incorporate expectations about firms' long‐term prospects. Further, their stock recommendations are more profitable, consistent with their production of long‐term information enhancing valuation. Our findings highlight the role of cultural long‐term orientation in shaping analysts' information production in capital markets.

We find that forecast revisions by analysts with more favorable surnames elicit stronger market reactions. The effect is stronger among firms with lower institutional ownership and for analysts with non-American first names. Following the 9/11 terrorist attacks, and France and Germany's opposition to the Iraq War, revisions by analysts with Middle Eastern and French or German surnames, respectively, generated weaker market reaction. Surname favorability is not associated with forecast quality, but it has complementary effects with forecast performance on analysts’ career outcomes. Surname favorability mitigates under-reaction to forecast revisions. These findings are distinct from the effects of ethnic, cultural proximity, or in-group bias.