Abstract: Using more than 50,000 firm-years from 1988 to 2015, we show that the empirical relation between a firm’s Tobin’s q and managerial ownership is systematically negative. When we restrict our sample to larger firms as in the prior literature, our findings are consistent with the literature, showing that there is an increasing and concave relation between q and managerial ownership. We show that these seemingly contradictory results are explained by cumulative past performance and liquidity. Better performing firms have more liquid equity, which enables insiders to more easily sell shares after the IPO, and they also have a higher Tobin’s q.
Refer to the tab Presentations for a comprehensive list of talks.
with Florian Berg and Zacharias Sautner
Abstract: The explosion in ESG research has led to a strong reliance on ESG rating providers. We document widespread changes to the historical ratings of a key rating provider, Refinitiv ESG (formerly ASSET4). Depending on whether the original or rewritten data are used, ESG-based classifications of firms into ESG quantiles and tests that relate ESG scores to returns change. While there is a positive link between ESG scores and firms’ stock market performance in the rewritten data, we fail to observe such a relationship in the initial data. The ESG data rewriting is an ongoing rather than a one-off phenomenon.
Refer to the tab Presentations for a comprehensive list of talks.
solo-authored
Abstract: I study the quality of the governance pillar of environmental, social, and corporate governance (ESG) ratings. Since 2018, ESG integration strategies, many of which rely on ESG ratings, have dominated the ESG investing sphere. I examine the governance ratings’ ability to provide useful information to shareholders. My results not only suggest rather limited success in predicting relevant firm outcomes (such as financial-statement restatements, governance incidents, class action lawsuits, operating performance, firm value, stock returns, and credit ratings), but in the case of most raters, I identify multiple instances of counterintuitive results, that is, with the opposite direction of the effect.
Selected Talks:
2024 Finance Research Seminar at the University of Bern (December 2024)
Asia-Pacific Corporate Finance Online Workshop (ACFOW, March 2025)
Sustainable Finance Brown-Bag Seminar, University of Hamburg (March 2025)
CFA Society Slovakia ESG Summit 2025 (March 2025)
CFA Society Switzerland Webinar (April 2025)
7th Erasmus Corporate Governance Conference in Rotterdam (June 2025)
Refer to the tab Presentations for a comprehensive list of talks.
with Sebastian Rink
Abstract: We investigate whether individuals correctly interpret corporate sustainability disclosures using a pre-registered survey experiment. We provide novel evidence that individuals can meaningfully differentiate emissions of firms along a greenness scale, even though their assessments exhibit a central tendency bias. This leads to overestimation of greenness among browner firms and underestimation among greener firms, with the bias disproportionately stronger for greener firms. We observe this bias even among finance professionals and sustainability experts. As a result, firms' financial incentives to invest in emissions reductions may be attenuated. However, we also demonstrate that some disclosure design features improve individuals' differentiation ability.
Featured on:
ICGN Policy Newsletter (March 2026)
Presentations (incl. scheduled):
American Finance Association (AFA) 2027
European Finance Association (EFA) 2026
National Bank of Slovakia NBS (2026)
2025 FS-UNEP Brown Bag Seminar
Refer to the tab Presentations for a comprehensive list of talks.
solo-authored
Abstract: This paper presents the first large-scale empirical analysis of the pledging phenomenon among U.S. CEOs. Between 2007 and 2016, 7.6% of publicly listed U.S. firms disclosed that their CEOs had pledged company stock as collateral for a loan. On average, CEOs pledge 38% of their shares. The mean loan value is an economically sizeable $65 million. CEOs use the funds to either double down (6.0%), hedge their ownership (3.5%), or to obtain liquidity while maintaining ownership (90.5%). My event study results reveal that stock market participants view pledging as value-enhancing, but perceive significant pledging as value-destroying. Similarly, I find no evidence of its negative shareholder value consequences, except for CEOs who engage in significant pledging.
Refer to the tab Presentations for a comprehensive list of talks.
solo-authored, July 2020 Dissertation Chapter [Link]
Abstract: This paper provides the first systematic evidence on the incidence, magnitude, and consequences of margin-call-induced sales by U.S. CEOs. Using a comprehensive hand-collected sample of CEOs who pledge company stock as collateral, I identify margin-call sales following stock price declines and study their implications for CEO incentives and firm policies. I find that 14.8% of pledging CEOs experience margin-call sales, reducing CEO ownership by 31.2% on average and 22.0% at the median. Yet 87.8% of firms do not restrict pledging afterward, and compensation contracts change little. I find no evidence of reduced investment; founder CEOs increase R\&D following margin calls.
with Michael Ryf, Larissa Schäfer and Sascha Steffen
Abstract: A methodology change of an ESG rating provider introduces plausibly exogenous variation in firms’ ESG ratings, which allows us to study their effect on the cost of debt of U.S. firms. We find that loans spreads of downgraded ESG-rated firms in the secondary corporate loan market increase by about 10% compared to non-downgraded ESG-rated firms and compared to before the rating downgrade. ESG rating downgrades do not increase fundamental default risk of the firm but the premium charged by lenders above the spread for default risk. We find that the effect is stronger for firms that are more financially constrained and firms that are more exposed to ESG and, particularly, climate risk concerns. Importantly, we find that also loan spreads of private (unrated) firms in industries especially affected by ESG rating downgrades increased after the methodology change.
Refer to the tab Presentations for a comprehensive list of talks.
with Sophie-Dorothee Rotermund
Abstract: In 2020, ESG integration surpassed exclusionary screening-based strategies and became the largest sustainable investment strategy globally. Despite their numerous flaws, ESG ratings continue to shape the investment process. We therefore provide an overview of the most common issues that researchers and practitioners should be aware of when working with ESG ratings. The issues we identify pertain to ISS ESG, MSCI ESG, Sustainalytics ESG, S&P ESG, and Refinitiv ESG ratings, among others.