L'AGEFI 2008 01 15 Interview with Jean-Piere Danthine by Sylvain Frochaux discussing the "paying for luck puzzle" in corporate finance.
Professor Danthine anticipates an increase in shareholder activism.
Danthine points out that the five largest investment banks on Wall Street will distribute a record $39 billion in bonuses in 2007, despite the fact that three have published the worst fourth quarter results in their history. Shareholders have lost more than 80 billion in value.
He identifies problems in corporate governance and refers to Michael Jensen's work in the 1980s concerning agency costs and ownership structure.
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