Financial restatements are costly, but frequent, events and many firms restate several times. This paper asks why rational managers engage in misreporting, in spite of the costly consequences. We present a simple extension to the Fischer and Verrecchia (2000) model, which provides testable...

We examine the influence of behavioral characteristics on the design of debt covenants. We find that firms with overconfident CEOs face tighter restrictions on their ability to make future investments, acquisitions, and raise additional debt financing. These restrictions are partially mitigated...

Prior research calls into question the general informational role of analysts by documenting inefficiencies, biases, and limitations of sell-side analyst research (e.g., forecasts). Rather than examine the general informational value of analyst research, I examine the value of analyst research...

While US companies mainly list their board of directors alphabetically, this is not the case for Chinese companies, most of which list their independent directors last. We interpret the listing order of Chinese directors as board hierarchy, reflecting power allocation within the board. Based on...

According to the rent-extraction hypothesis, weak corporate governance allows entrenched CEOs to capture the pay-setting process and benefit from events outside of their controlget paid for luck. In this paper, I find that the independence requirement imposed on boards of directors by the...

According to the rent-extraction hypothesis, weak corporate governance allows entrenched CEOs to capture the pay-setting process and benefit from events outside of their controlget paid for luck. In this paper, I find that the independence requirement imposed on boards of directors by the...

Remuneration consultants are an integral part of the process of determining executive pay in large listed companies. This paper discusses the role of the consultants in the United Kingdom, United States and Canada, analyses their industry and the factors currently affecting it, and summarizes...

I use the new SEC disclosure rule of 2006 to examine the role of CEO inside debt (pension plans and deferred compensation plans) in CEO compensation problem. I find that the contribution ratio of deferred compensation to total cash compensation is positively related to firm size, firm liquidity...

Using a sample of U.S. S&P 1500 firms from 2007-2009, we provide new evidence showing that CEOs of firms engaging BIG6 consultants receive lower equity payments and lower total compensations compared to that of firms engaging SMALL consultants. In addition, we also find that a switch in a firm's...

Critics allege that executive compensation consultants face potential conflicts of interest (lack of independence) that might lead to higher CEO pay. Conflicts of interest include the desires to "cross-sell" service and to secure "repeat business". Using a unique data set of compensation...