Léa H. Stern
Department of Finance and
Foster School of Business
University of Washington
Seattle, WA 98195
Institutional Affiliation: University of Washington
NBER Working Papers and Publications
|March 2018||Selecting Directors Using Machine Learning|
with Isil Erel, Chenhao Tan, Michael S. Weisbach: w24435
Can algorithms assist firms in their decisions on nominating corporate directors? We construct algorithms to make out-of-sample predictions of director performance. Tests of the quality of these predictions show that directors predicted to do poorly indeed do poorly compared to a realistic pool of candidates. Predictably poor performing directors are more likely to be male, have more past and current directorships, fewer qualifications, and larger networks than the directors the algorithm would recommend in their place. Machine learning holds promise for understanding the process by which governance structures are chosen, and has potential to help real-world firms improve their governance.
|September 2010||Pay for Performance from Future Fund Flows: The Case of Private Equity|
with Ji-Woong Chung, Berk A. Sensoy, Michael S. Weisbach: w16369
Lifetime incomes of private equity general partners are affected by their current funds' performance through both carried interest profit sharing provisions, and also by the effect of the current fund's performance on general partners' abilities to raise capital for future funds. We present a learning-based framework for estimating the market-based pay for performance arising from future fundraising. For the typical first-time private equity fund, we estimate that implicit pay for performance from expected future fundraising is approximately the same order of magnitude as the explicit pay for performance general partners receive from carried interest in their current fund, implying that the performance-sensitive component of general partner revenue is about twice as large as commonly discu...
Published: Ji-Woong Chung & Berk A. Sensoy & LÃ©a Stern & Michael S. Weisbach, 2012. "Pay for Performance from Future Fund Flows: The Case of Private Equity," Review of Financial Studies, Society for Financial Studies, vol. 25(11), pages 3259-3304. citation courtesy of