The media has an incentive to publish sensational news. We study how this incentive affects the accuracy of media coverage in the context of merger rumors. Using a novel dataset, we find that accuracy is predicted by a journalist's experience, specialized education, and industry expertise. Conversely, less accurate stories use ambiguous language and feature well-known firms with broad readership appeal. Investors do not fully account for the predictive power of these characteristics, leading to an initial target price overreaction and a subsequent reversal, consistent with limited attention. Overall, we provide novel evidence on the determinants of media accuracy and its effect on asset prices.

We study the efficacy of remote arrangements between CEOs and firms. Such arrangements attract executive talent and overcome labor market segmentation but introduce frictions. Remote arrangements are associated with lower operating performance, firm valuation, and insider reviews. Using the private costs from uprooting the CEO’s spouse as an instrument for the CEO’s decision to seek remote work, we find similar negative effects. The performance decline increases for CEOs who live further away and who cross multiple time zones. The mechanisms include the CEO’s loss of information, short-termism, and consumption of leisure, such as recreational boats and beach homes.

Using data from individual Census records on the wealth of managers’ parents, we find that mutual fund managers from poor families outperform managers from rich families. We argue that managers born poor face higher entry barriers into asset management. Consistent with this view, managers born poor are promoted only if they outperform, while those born rich are more likely to be promoted for reasons unrelated to performance. Overall, we establish a first link between fund managers’ family descent and their ability to create value. Received December 8, 2016; editorial decision November 20, 2017 by Editor Andrew Karolyi.

Using hand-collected data on divisional managers at conglomerates, we find that a change in industry pay in one division generates spillovers on managerial pay in other divisions of the same firm. These spillovers arise only within the boundaries of a conglomerate. The intra-firm spillovers increase when conglomerates have excess cash and when managers have more influence over its distribution, but decline in the presence of strong governance. These spillovers are associated with weaker performance and lower firm value. Our evidence is consistent with simultaneous cross-subsidization via managerial compensation and capital budgets and suggests that these practices arise in similar firms. Received March 19, 2015; editorial decision August 30, 2016 by Editor Francesca Cornelli.