Endnotes

1. Jennifer Reingold, Richard Melcher, and Gary McWilliams, "Executive Pay: Stock Options Plus a Bull Market Made a Mockery of Many Attempts to Link Pay to Performance," BusinessWeek , April 20, 1998, p. 2.

2. Viral Acharya, Kose John, and Rangarajan Sundaram, "On the Optimality of Resetting Executive Stock Options," Journal of Financial Economics 57 (2000): 65 “101.

3. Shane Johnson and Yisong Tian, "Indexed Executive Stock Options," Journal of Financial Economics 57 (2000): 35 “64.

4. James Booth and Daniel Deli, "On Executives of Financial Institutions as Outside Directors," Journal of Corporate Finance 5 (1999): 227 “250.

5. Vidhan Goyal and Chul Park, "Board Leadership Structure and CEO Turnover," forthcoming in the Journal of Corporate Finance , 2002.

6. David Yermack, "Higher Market Valuation of Companies with a Small Board of Directors," Journal of Financial Economics 40 (1996): 185 “212.

7. Leslie Boni and Kent Womack, "Solving the Sell-Side Research Problem: Insights from Buy-Side Professionals," Dartmouth College working paper, August 8, 2002.

8. Recommendations are adapted from "U.S. Corporate Governance Principles," CalPERS website, www.calpers-governance.org.

9. Paul Gompers, Joy Ishii, Andrew Metrick, "Corporate Governance and Equity Prices," forthcoming in the Quarterly Journal of Economics , February 2003.