CEO turnover and properties of accounting information

Engel, Ellen; Hayes, Rachel M.; Wang, Xue

doi:10.1016/j.jacceco.2003.08.001

Cited by 249 publications

(69 citation statements)

References 37 publications

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“…As in prior research, (Dah et al, 2014;Engel et al, 2003;Murphy & Zimmerman, 1993) the age variables appear to be the most important factors in predicting turnover. However the negative sign shows that after SEC 2004 rule, directors tend to stay more into the board when the retirement age is not reached.…”

Section: Turnover and Sec Rule 2004supporting

confidence: 58%

“…In this view, we use an accounting and market based measure of performance. The accounting measure capture the value created by the existing manager and the market measure fully capitalize the expected value created (Engel, Hayes, & Wang, 2003). The choice of these two measures is that accounting and market based measure of performance reflect both the impact of the economic shock to the firm and the firm's anticipated response to the shock (Easterwood, Ince, & Raheja, 2012).…”

Section: Methodsmentioning

confidence: 99%

“…Gamma in the equation (1) represents a set of control variables representing age of directors, insider holdings, number of independent and board size. Like (Engel et al, 2003), we added a dummy variable equal 1 if a director age is between 64-66 to control for the standard retirement age effect and a dummy year indicators as controls. Our empirical performance measures, however, are computed over the preceding four quarters.…”

Section: Methodsmentioning

confidence: 99%

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The SEC Disclosure Requirement and Directors’ Turnover Around Stock Repurchase

Hamouda¹,

HENCHIRI²

2017

IJEF

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The aim of this research is to outline board turnover when firms repurchase their own shares. Indeed, to control insiders' short-swing trading during repurchase events and protect outsiders against speculation, it is useful to know how boards are changed. We examine the introduction of the SEC 2004 disclosure requirement effectiveness on repurchase announcement returns and director's turnover in a sample of 764 companies over 1998 to 2013. In a broad cross-section of US firms, we argue that the SEC 2004 Rule appears to receive greater weight in turnover decision. However, the more insiders are entrenched into the board, the more they cannot be replaced easily even though 2004 disclosure Rule is adopted. We also find that a large number of board independencecontinue to explain the variation of board turnover.

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Section: Turnover and Sec Rule 2004supporting

confidence: 58%

Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

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The SEC Disclosure Requirement and Directors’ Turnover Around Stock Repurchase

Hamouda¹,

HENCHIRI²

2017

IJEF

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“…I also include both CHREV and CHNI to capture the magnitude of the restatement. Prior firm performance is also associated with CEO turnover decisions (Engel et al 2003). Therefore, I include the cumulative stock returns for the year prior to (PRERET) and the year following (POSTRET) the restatement announcement to control for market-based performance, and return on assets (ROA) prior to the restatement to control for operatingbased performance.…”

Section: Consequences Of Misreporting Testsmentioning

confidence: 99%

Accounting complexity, misreporting, and the consequences of misreporting

Peterson

2011

Rev Account Stud

109

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I examine whether accounting complexity in the area of revenue recognition increases the probability of restating reported revenue. I measure revenue recognition complexity using the number of words and recognition methods from the revenue recognition disclosure in the 10-K and a factor score based on the number of words and methods. Tests reveal that revenue recognition complexity increases the probability of revenue restatements, and these restatements are the result of both intentional and unintentional misreporting. Furthermore, complexity moderates the consequences of restatement-lower incidence of AAERs, less negative restatement announcement returns, and lower subsequent CEO turnoversuggesting that stakeholders of the firm consider accounting complexity when responding to misreporting.

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“…Another concern with ROA is that earnings management could be more aggressive and thus the quality of ROA could be lower in state-controlled A share firms than in state-controlled H or Red Chip firms. Therefore, one would naturally expect the optimal weight on ROA in the cash compensation contract to be lower while the weight on alternative performance measures (for example, RET) to be higher in state-controlled A share firms than in state-controlled H or Red Chip firms (see Engel et al 2003). Alternatively, one may also expect shareholders to turn to alternative compensation contracts (for example, long-term financial incentives) in order to motivate managers to increase shareholder value.…”

Section: The Level Regressionmentioning

confidence: 99%

Hong Kong stock listing and the sensitivity of managerial compensation to firm performance in state-controlled Chinese firms

Rui

Wei

2011

Rev Account Stud

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We compare the sensitivity of managerial cash compensation to firm performance, the level of long term managerial incentives, and the sensitivity of CEO turnover to firm performance for three types of state-controlled Chinese firms: A shares (firms incorporated and listed in mainland China), H shares (firms incorporated in mainland China but listed in Hong Kong), and Red Chip shares (firms incorporated outside mainland China and listed in Hong Kong). We find no difference in the three pay-for-performance sensitivity measures between H shares and A shares. The cash pay-for-performance sensitivity and the level of long-term managerial incentives are higher for Red Chip shares than for the other two firm types. However, the sensitivity of CEO turnover to firm performance is insignificant for all three firm types. Our study illustrates the complexity in the influence of mainland China's versus Hong Kong's institutional forces on state-controlled Chinese firms listed in Hong Kong.

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CEO turnover and properties of accounting information

Cited by 249 publications

References 37 publications

The SEC Disclosure Requirement and Directors’ Turnover Around Stock Repurchase

The SEC Disclosure Requirement and Directors’ Turnover Around Stock Repurchase

Accounting complexity, misreporting, and the consequences of misreporting

Hong Kong stock listing and the sensitivity of managerial compensation to firm performance in state-controlled Chinese firms

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