Showing 1 - 10 of 14,832
This study investigates whether and how equity investors value the accounting expertise of chief financial officers (CFOs) in managing cash assets. Using hand-collected CFO data of S&P 1500 firms from 1999 to 2015, we find that the stock market places a higher value on cash assets when firms...
Persistent link: https://www.econbiz.de/10014265512
In the wake of the backdating scandal, many firms began awarding options at scheduled times each year. Scheduling option grants eliminates backdating, but creates other agency problems. CEOs that know the dates of upcoming scheduled option grants have an incentive to temporarily depress stock...
Persistent link: https://www.econbiz.de/10013006948
Traditional stock option grant is the most common form of incentive pay in executive compensation. Applying a principal-agent analysis, we find this common practice suboptimal and firms are better off linking incentive pay to average stock prices. Among other benefits, averaging reduces...
Persistent link: https://www.econbiz.de/10013100690
This study examines the effect of chief executive officer (CEO) equity incentive duration on firm-specific ex ante crash risk. Using a measure that explicitly accounts for the length of stock and option grant vesting terms (Gopalan et al. 2014, 2021), we find that longer CEO equity incentive...
Persistent link: https://www.econbiz.de/10013405791
This paper studies the first day return of 227 carve-outs during 1996-2013. I find that the first day return of newly issued subsidiary stocks is explained by the reporting distortions in the pre IPO period, conditioned on whether the executives and directors of the subsidiary received stock...
Persistent link: https://www.econbiz.de/10012970504
In this study, we examine whether CEOs' stock-based compensation has any relationship with the disclosure of highly proprietary information. While prior studies suggest that stock-based compensation provides managers with an incentive to enhance their voluntary disclosures in general, we argue...
Persistent link: https://www.econbiz.de/10012853081
Do equity investors care about pay dispersion and income inequality? We address this question by examining equity markets' reaction and investors' portfolio rebalancing in response to the first-time disclosure by U.S. public companies of the ratio of CEO to median worker pay in 2018. We find...
Persistent link: https://www.econbiz.de/10012843823
This paper demonstrates that executive compensation convexity, measured as the sensitivity of managerial equity compensation portfolios to stock volatility, predicts firm-specific crashes. A bottom-to-top decile change in compensation convexity results in a 21% increase in a firm's crash risk...
Persistent link: https://www.econbiz.de/10013020017
We study the motive of using equity-based pay in executive compensation: the risk-sharing motive versus the performance-measuring motive. The empirical design goes through the relationship between equity-based pay and stock price informativeness (SPI). We find equity-based pay decreases in SPI,...
Persistent link: https://www.econbiz.de/10012107682
We study the effects of stock price informativeness (SPI) on the complexity of executive compensation. Using textual analysis of SEC proxy statements to construct measures of compensation complexity, we find informative stock prices reduce pay complexity. Using mutual fund redemption as an...
Persistent link: https://www.econbiz.de/10012104644