Financial Markets and Corporate Strategy Mark Grinblatt • Sheridan Titman Go Index 1

Using this presentation This PowerPoint presentation is a companion to the text Financial Markets and Corporate Strategy, by Mark Grinblatt and Sheridan Titman. It contains each Exhibit featured throughout all 23 chapters and Appendix A of the text. It is organized using the sections and subheadings of each chapter. To simply browse through each chapter in order, use the “Forward” and “Back” buttons. To go to a specific chapter or section, use the “Index” button on the introductory screen. We invite you to customize this presentation for your own use. One way to do that might be to add your own screens of bullet points - but feel free to use your imagination. Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman 2

Part V Incentives, Information, and Corporate Control Back Forward Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman 3

Chapter 17: How Managerial Incentives Affect Financial Decisions Back Part V Incentives, Information, and Corporate Control Chapter 17: How Managerial Incentives Affect Financial Decisions Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman 4

17.1 The Separation of Ownership and Control Chapter 17 How Managerial Incentives Affect Financial Decisions 17.1 The Separation of Ownership and Control Whom Do Managers Represent? What Factors Influence Managerial Incentives? How Management Incentive Problems Hurt Shareholder Value Why Shareholders Cannot Control Mangers Changes in Corporate Governance [INSERT YOUR COMMENTS HERE] Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman 5

17.2 Management Shareholdings and Market Value Chapter 17 How Managerial Incentives Affect Financial Decisions 17.2 Management Shareholdings and Market Value The Effect of Management Shareholdings on Stock Prices Management Shareholdings and Firm Value: The Empirical Evidence [INSERT YOUR COMMENTS HERE] Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman 5

17.3 How Management Control Distorts Investment Decisions Chapter 17 How Managerial Incentives Affect Financial Decisions 17.3 How Management Control Distorts Investment Decisions The Investment Choices Managers Prefer Outside Shareholders and Managerial Discretion [INSERT YOUR COMMENTS HERE] Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman 5

17.4 Capital Structure and Managerial Control Chapter 17 How Managerial Incentives Affect Financial Decisions 17.4 Capital Structure and Managerial Control The Relation between Shareholder Control and Leverage How Leverage Affects the Level of Investment A Monitoring Role for Banks [INSERT YOUR COMMENTS HERE] Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman 5

17.5 Executive Compensation Chapter 17 How Managerial Incentives Affect Financial Decisions 17.5 Executive Compensation The Agency Problem Is Executive Pay Closely Tied to Performance? How Does Firm Value Relate to the Use of Performance-Based Pay? Is Executive Compensation Tied to Relative Performance? Stock-Based versus Earnings-Based Performance Pay Compensation Issues, Mergers, and Spin-Offs [INSERT YOUR COMMENTS HERE] Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman 5

Exhibit 17.1: CEOs with the Best and Worst Incentives (Part 1 of 2) CEOs of Large Companies with the Best Incentive Pay Note: These observations come from a sample of CEOs in the 250 largest companies, ranked by 1988 sales. Source: Jensen and Murphy (1990). Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman

Exhibit 17.1: CEOs with the Best and Worst Incentives (Part 2 of 2) CEOs of Large Companies with the Worst Incentive Pay Note: These observations come from a sample of CEOs in the 250 largest companies, ranked by 1988 sales. Source: Jensen and Murphy (1990). Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman

17.6 Summary and Conclusions Chapter 17 How Managerial Incentives Affect Financial Decisions 17.6 Summary and Conclusions [INSERT YOUR COMMENTS HERE] Financial Markets and Corporate Strategy Back Forward Mark Grinblatt • Sheridan Titman 5