Discretionary disclosure and stock-based incentives

Nagar, Venky; Nanda, Dhananjay; Wysocki, Peter D.

doi:10.1016/s0165-4101(02)00075-7

Cited by 513 publications

(327 citation statements)

References 34 publications

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“…For example, Nagar et al (2003) show that alignment of CEO The newly appointment CFO in this study is associated with lower discretionary accruals, especially if it is an external appointment Jiang et al (2010) Chief Financial Officer S&P 1500 firms in the US from 1993 to 2006…”

Section: Introductionmentioning

confidence: 71%

“…Jensen and Meckling (1976) and Datta et al (2005) point out that managerial equity holdings can alleviate agency problems and facilitate managers' incentive alignment with investors (Jensen and Meckling 1976;Datta et al 2005). Nagar et al (2003) find that CEOs tend to provide more frequent management earnings forecasts when the interests of CEOs and shareholders are aligned. Thus, we argue that board secretaries' equity holdings motivate them to reduce information asymmetry by issuing high-quality management earnings forecasts.…”

Section: Hypothesis Development: Equity Holdingsmentioning

confidence: 99%

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Do Board Secretaries Influence Management Earnings Forecasts?

Duan

Hou

2017

J Bus Ethics

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The role of board secretaries is a unique institutional feature in China. Individuals in this senior executive role are responsible for coordinating information disclosure. We study the impact of board secretaries on management earnings forecasts and find that their legal expertise, accounting expertise and foreign experience help improve management earnings forecast quality. The quality of forecasts, as indicated by their occurrence, frequency, precision and accuracy, is also positively associated with the role duality (e.g. board director, CFO or other senior executive role) and equity holdings of board secretaries and negatively associated with their political connection. The quality of forecasts is found to increase the compensation of board secretaries. Finally, we show that the equity holding of board secretaries reduces litigation risks and increases corporate philanthropic giving.

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Section: Introductionmentioning

confidence: 71%

Section: Hypothesis Development: Equity Holdingsmentioning

confidence: 99%

Do Board Secretaries Influence Management Earnings Forecasts?

Duan

Hou

2017

J Bus Ethics

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“…For example, Nagar, Nanda, and Wysocki (2003) argue that the stock price is increasing in the quality of the information environment, and providing executives with equity-based incentives should therefore promote a commitment to high quality disclosure. They find a positive relation between executives' equity incentives and proxies for the quality of firms' disclosures.…”

Section: The Role Of Management Incentives In Facilitating the Informmentioning

confidence: 99%

The role of information and financial reporting in corporate governance and debt contracting

Armstrong

Guay

Weber³

2010

Journal of Accounting and Economics

1,123

350

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Abstract:We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agency conflicts between shareholders and creditors, and offer researchers some suggested avenues for future research. Key themes include the endogenous nature of debt contracts and governance mechanisms with respect to information asymmetry between contracting parties, the heterogeneous nature of the informational demands of contracting parties, and the heterogeneous nature of the resulting governance and debt contracts. We also emphasize the role of a commitment to financial reporting transparency in facilitating informal multi-period contracts among managers, directors, shareholders, and creditors.Keywords: financial accounting; corporate governance; board structure; contracting; executive compensation; debt contracts; informal contracts We thank the following for helpful comments and suggestions:

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“…For example, a compensation contract is always based on mandatory information [21] and is an important source of information used by investors to monitor managers [22]. In addition, mandatory information contributes to the monitoring role of stock markets as an important source of firmspecific information [23]. Therefore, if mandatory disclosure quality reduces agency problems between the managers and investors, it can then improve the investment efficiency by increasing shareholders' ability to monitor managers and thus reduce financing costs and improve project selection.…”

Section: Research Hypothesesmentioning

confidence: 99%

Research on the Dynamic Model of Mandatory Disclosure Quality and Investment Efficiency

Zhu¹,

Hoffmire²,

Wang³

2015

TOCSJ

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This paper investigates the dynamic relationship between mandatory disclosure quality and investment efficiency. Through building a three dates' model in which the firm's investment decision is jointly affected by the short-term share price in the capital market and by the total cash flows of the firm, the paper analyzes the impact of strategy of information disclosure of investment efficiency. The results show that when the firm's mandatory disclosure quality is very low, it cannot affect the firm's investment decision; when the firm's mandatory disclosure quality is enhanced, it can reduce overinvestment or underinvestment and leads to enhancing investment efficiency. Further, this paper uses 3,726 samples of Chinese listed firms during the period 2008-2013 to test the empirical model and finds that the mandatory disclosure quality is negatively associated with underinvestment and overinvestment. This paper contributes to expand the information disclosure literature by examining the consequences of information disclosure.

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Discretionary disclosure and stock-based incentives

Cited by 513 publications

References 34 publications

Do Board Secretaries Influence Management Earnings Forecasts?

Do Board Secretaries Influence Management Earnings Forecasts?

The role of information and financial reporting in corporate governance and debt contracting

Research on the Dynamic Model of Mandatory Disclosure Quality and Investment Efficiency

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