Research

Abstract. While management research traditionally views corporate owners as governance actors, their influence has also recently extended to driving complex organizational change within the firms they own. This raises the question of how owners implement such change across their firms. I address this in the context of private equity, using career history and work activity data for nearly 9 million employees across 12,775 firms receiving first-ever private equity investment in 1997-2024. I find that following investment, portfolio firms increase hiring employees from their owner's prior portfolio firms, particularly into managerial, finance, and operations roles. This common-owner hiring is more prevalent under owners who prioritize strategic growth relative to those focused on financial engineering or cost control, and the roles that common-owner employees occupy reflect the strategy the owner emphasizes. Portfolio firms that receive those employees then shift their organizational activities in a way that aligns with the owner's particular focus. These findings reveal a relational mechanism through which owners shape firm strategy: as owners evolve from monitors, they implement complex organizational changes by deploying trusted talent across firm boundaries.

Abstract. How do firms balance market competitiveness with internal cohesion when setting employee pay? We examine this question using confidential compensation data on 19 million U.S. employees across 479 firms varying in knowledge intensity. We construct precise pay reference groups: internal benchmarks based on skill-equivalent peers across functions and market benchmarks based on same occupation, skill level, and region at other firms. We find that, in low knowledge-intensity firms, pay is equally sensitive to both internal and market benchmarks, while in high knowledge-intensity firms, pay becomes decoupled from market forces and aligns with internal benchmarks. Internal pay alignment also increases following CEO transitions that prioritize innovation. These patterns are driven by high-skilled employees in roles requiring complex problem-solving and collaboration. Moreover, firms with greater internal pay alignment generate more patents, including breakthrough innovations. Altogether, our findings reveal that, while some firms maintain close market alignment, knowledge-intensive firms appear to decouple pay from market forces. This is particularly the case for their skilled workers, consistent with firms prioritizing internal social dynamics in contexts where complex problem-solving and collaboration are important for value creation.

Abstract. The rise of active owners—hedge funds and private equity firms—has raised questions about the influence of corporate owners on employee compensation. Prior research documents that active owners reduce overall compensation through workforce restructuring and slower wage growth. What remains unexplored is whether active owners also pay less for comparable work: whether they compensate the same jobs differently than other owners. Using detailed compensation from over 20 million employee records across 896 U.S. firms, we compare pay within narrowly defined labor markets that hold constant year, region, occupation, and skill level. We find that firms with active owners pay 2 to 4% less for comparable work than other firms. These differentials manifest both as lower base salary and flatter incentive pay, and appear to reflect, at least in part, an owner treatment effect. Notably, the effects are concentrated in more monitorable contexts, including routine jobs, jobs with quantifiable outputs, and those in less knowledge-intensive industries. These patterns are consistent with active owners substituting compensation-based incentives with managerial oversight, particularly in quantifiable and routine settings. This suggests that, as work becomes more measurable, firm ownership may play a greater role in shaping employee outcomes. 

Abstract. Firms' access to talent depends on workers' willingness to relocate, yet little is known about how ideological incongruence between a firm's location and workers constrains mobility. We propose that state-level regulatory changes signal prevailing ideologies, creating frictions for workers whose values conflict with those signals. We analyze job applications to technology startups around the overturning of Roe v. Wade, which triggered abortion bans in certain states. Applications to in-person jobs in these states fell relative to those retaining protections, while applications to remote jobs were unaffected. Analyses by applicant and location attributes suggest value misalignment as the primary driver. Firms offered higher pay to sustain applicant interest following the ruling. Our findings indicate that both remote work and compensation can mitigate value-based mobility frictions.

Abstract. Venture capital (VC) investors provide startups with both financial and strategic resources, yet their role in facilitating talent acquisition remains under-explored. We examine talent flows among startups within a VC’s portfolio network. Using individual career history data for 24,006 VC-backed startups in the U.S. from 2000 to 2022, we document that a significant share of new hires hail from the investor’s own portfolio, particularly when VCs have a large portfolio and talent-support capabilities. These talent flows are strategically timed: departures to peer startups occur primarily when the source startup exits the portfolio through failure, acquisition, or IPO. Leveraging quasi-exogenous variation from staggered changes in conflict-of-interest laws, we find that this within-portfolio hiring significantly improves startup survival, growth, and exit outcomes. These results highlight how VCs enhance startup performance by facilitating human capital flows, specifically by helping transition employees from exiting startups to active ones within their portfolios.