Person: Gómez, Juan Pedro
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Juan Pedro
Last Name
Gómez
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IE University
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IE Business School
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Finance
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Publication Tax Enforcement and Income Diversion: Evidence after Putin’s election in 2000(Now Publisher, 2019-10-08) Gómez, Juan Pedro; Mironov, Maxim; https://ror.org/02jjdwm75Using a direct estimate of income diversion for a large sample of Russian firms from 1999 through 2004, we show that an increase in tax enforcement after Putin’s election in 2000 is associated with a decrease in the appropriation of private rents by insiders both in firms explicitly targeted as tax evaders and among the largest firms in the sample. We interpret the latter as evidence consistent with a simultaneous spillover effect derived from the threat posed by tighter tax enforcement. This effect persists both economically and statistically in a subsample of listed companies after controlling for changes in firm-level corporate governance.Publication Compensation contracts and fire sales(Elsevier, 2015-06) Gete, Pedro; Gómez, Juan Pedro; Ministerio de Economía y Competitividad; https://ror.org/02jjdwm75This paper analyzes the impact of remuneration practices on banks’ risk-taking in a model with fire sales externalities. When these externalities are not internalized by a bank's shareholders and executives, borrowing and fire sales are higher than the socially optimal level. Our analysis shows that plain-vanilla equity fails to internalize fire sales externalities. Deferred equity and long-term bonuses unrelated to short-term profits can restore social efficiency. Bail-in bonds can achieve efficiency at a smaller cost since they allow for state-contingent payments. It is not the level but the composition of variable compensation that determines the inefficiency. Excessive regulation may lead to suboptimal levels of risk-taking. Government guarantees reinforce the fire sales externalities and the need for regulation.Publication Portfolio Manager Compensation in the U.S. Mutual Fund Industry(Wiley, 2018-12-12) Ma, LinLin; Tang, Yuehua; Gómez, Juan Pedro; Ministry of Education of Singapore; Ministerio de Economía y Competitividad; Banco de España; https://ror.org/02jjdwm75We study compensation contracts of individual portfolio managers using hand-collected data of over 4,500 U.S. mutual funds. Variations in the compensation structures are broadly consistent with an optimal contracting equilibrium. The likelihood of explicit performance-based incentives is positively correlated with the intensity of agency conflicts, as proxied by the advisor's clientele dispersion, its affiliations in the financial industry, and its ownership structure. Investor sophistication and the threat of dismissal in outsourced funds serve as substitutes for explicit performance-based incentives. Finally, we find little evidence of differences in future performance associated with any particular compensation arrangement.Publication Dealing with Overleverage: Restricting Leverage vs. Restricting Variable Compensation(SSRN, 2018-01-25) Gete, Pedro; Gómez, Juan Pedro; https://ror.org/02jjdwm75We study policies that regulate executive compensation in a model that jointly determines executives' effort, compensation and firm leverage. The market failure that justifies regulation is that executives are optimistic about asset prices in states of distress. We show that shareholders propose compensation packages that lead to socially excessive leverage. Say-on-pay regulation does not reduce the incentives for leverage. Regulating the structure of compensation (but not its level) with a cap on the ratio of variable-to-fixed pay delivers the right leverage. However, it is more efficient to directly regulate leverage because restricting the variable compensation impacts managerial effort more than if shareholders are free to design compensation subject to a leverage constraint.