In this paper, we investigate the association between the general managerial ability of CEOs and the readability of 10-K reports. We find that the readability of 10-K reports is lower for firms managed by CEOs with general managerial ability. Our result is robust to change analysis, an alternate...

Literature on S&P 500 index firms shows that there is significant improvement in the performance due to increased scrutiny of media and investors. Recently Platikonova (2008) documents improvement in the disclosure quality for firms following their inclusion in the index. Since, auditors are...

Purpose Recent studies document that approximately two-thirds of sample firms have at least one audit committee member serving on their compensation committee (Liao and Hsu, 2013). Prior studies on overlap membership document that presence of audit committee members on compensation committee...

Electric utilities in the United States are subject to a cost-plus normal profits pricing that is designed to align the market value of equity with the balance sheet book value. Perfect alignment implies the equality of the market and book values. Extant empirical evidence suggests that, for...

This study tests whether shifts in the price to book ratio (PB) of electric utilities follow a partial adjustment rather than the pure adjustment process implied by the cost-plus pricing policy of regulation. The results for utilities are compared to benchmark results for manufacturing firms to...

This article focuses on regulation and variation in rate structures to investigate asymmetric return responses to positive and negative abnormal earnings. The abnormal earnings (AE) metric is measured as the difference between the actual profit rate and the maximum allowed profit rate, scaled by...

We examine the role of cash flow from operations (CFO) in CEO cash compensation. We test that CFO is contract-relevant in the presence of earnings, and more so when (1) the quality of earnings relative to the quality of CFO as a measure of performance is low and (2) the need for CFO as a...

This article focuses on regulation and variation in rate structures to investigate asymmetric return responses to positive and negative abnormal earnings. The abnormal earnings (AE) metric is measured as the difference between the actual profit rate and the maximum allowed profit rate, scaled by...