Al-Habbyel Yusoph

I study whether reducing executives' personal liability for their corporate decisions changes firms' demand for internal monitoring personnel, such as accountants and auditors. I argue that lower personal liability encourages executives to undertake riskier projects, raising the value of information about project selection and implementation and, in turn, demand for personnel who produce this information.

To test this, I exploit Delaware's officer exculpation reform, which allowed firms to limit officers' personal monetary liability. Using 63.5 million job postings in a triple-difference design, I find that Delaware firms reallocate recruiting toward monitoring jobs relative to comparable non-monitoring jobs. The response is stronger at firms with high R&D intensity and operating uncertainty. The effect is weaker when firms already have greater monitoring capacity or stronger external oversight. The findings suggest that firms adapt their governance to lower executive liability by placing greater emphasis on internal monitoring.

We examine whether firms incorporate anticipated climate transition costs into product market prices before regulation imposes direct compliance costs. We study U.S. airlines around the EPA's June 2015 proposed aircraft Endangerment Finding, which increased the credibility of future carbon standards without immediately changing operating costs.

Using carrier-route-quarter ticket data and a difference-in-differences design, we compare carriers with different transition risk exposure within the same route and quarter. Following the Endangerment Finding, a one-standard-deviation increase in fleet-age exposure is associated with 2.6 percent higher fares, or about $6 at the sample mean. The response is larger for carriers with greater residual-value risk through owned and capital-leased aircraft. Effects are stronger under tighter financial constraints and when competitive pressure leaves greater room to raise fares. In addition, subsequent declines in cash holdings and owned-fleet age are consistent with financing and fleet adjustments to transition exposure. Together, our findings show that expectations about climate regulation affect product-market decisions before compliance costs materialize and that asset ownership and lease classifications help identify where transition exposure resides.

How do common executive performance metrics shape firms' project choices and risk? In S&P 1500 bonus-scorecard data, fully homogeneous scorecards rise from 62 percent of teams in 2006 to 86 percent in 2022 and predict more R&D, fewer acquisitions, and higher idiosyncratic—but not systematic—volatility. The mechanism is coordinated risk-taking: shared metrics align executives' payoffs around the same projects, raising firm-specific risk without increasing exposure to economy-wide shocks.