The WT1 tumor suppressor gene encodes a zinc finger transcription factor expressed in differentiating glomerular podocytes. Complete inactivation of WT1 in the mouse leads to failure of mesenchymal induction and renal agenesis, an early developmental phenotype that prevents analysis of subsequent stages in glomerular differentiation [1]. In humans with Denys-Drash Syndrome, a heterozygous germline mutation in WT1 is associated with specific defects in glomeruli and an increased risk for developing Wilms Tumor [2,3]. WT1 target genes implicated in cell cycle regulation and cellular proliferation have been proposed [4], but the link between WT1 function and glomerular differentiation is unexplained. Here, we show that inducible expression of WT1 in rat embryonic kidney cell precursors leads to the induction of endogenous Podocalyxin, the major structural membrane protein of glomerular podocytes, which is implicated in the maintenance of filtration slits. Binding of WT1 to conserved elements within the Podocalyxin gene promoter results in potent transcriptional activation, and the specific expression pattern of Podocalyxin in the developing kidney mirrors that of WT1 itself. These observations support a role for WT1 in the specific activation of a glomerular differentiation program in renal precursors and provide a molecular basis for the glomerulonephropathy that is characteristic of Denys-Drash Syndrome.

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We document that firms included in the ExecuComp database tend to be larger, more complex, followed by more analysts, have greater stock liquidity levels, and have higher total, but less concentrated, institutional ownership than other firms. Based on these differences, we test and find support for three predictions. First, ExecuComp firms rely more heavily on earnings and stock returns in determining CEO cash compensation. Second, the weight on earnings is more sensitive to differences in the extent of growth opportunities for ExecuComp firms. Third, the positive relation between institutional ownership concentration and the value of stock option grants is stronger for ExecuComp firms. Overall, our results suggest that ExecuComp and non-ExecuComp firms operate in different contracting environments that lead to differences in the design of their executive compensation contracts. As a result, care should be taken in extending results based on ExecuComp samples to non-ExecuComp firms.

Efficient contracting predicts that ex ante severance pay contracts are offered to chief executive officers (CEOs) as protection against downside risk and to encourage investment in risky projects with a positive net present value (NPV). Consistent with this prediction, we find that ex ante contracted severance pay is positively associated with proxies for a CEO’s risk of dismissal and costs the CEO would incur from dismissal. Additionally, we show that the contracted severance payment amount is positively associated with CEO risk taking and the extent to which a CEO invests in projects that have a positive NPV. Overall, our findings imply that ex ante severance pay contracts are consistent with efficient contracting.