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- Title
- TWO ESSAYS ON FINANCIAL REPORTING QUALITY: EXAMINING MANAGERIAL PLACE ATTACHMENT AND CREDIT ACCESS.
- Creator
- Frost, Tracie Sloop, Kohlbeck, Mark, Florida Atlantic University, School of Accounting, College of Business
- Abstract/Description
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In essay 1, I investigate the association of place attachment and financial reporting quality. Management characteristics affect a wide range of corporate decisions, including decisions affecting financial reporting quality; however, the influence of managerial place attachment on corporate decision-making has received relatively little attention - even though place attachment is thought to play a significant role in forming individual identity. Place attachment affects the decisions that...
Show moreIn essay 1, I investigate the association of place attachment and financial reporting quality. Management characteristics affect a wide range of corporate decisions, including decisions affecting financial reporting quality; however, the influence of managerial place attachment on corporate decision-making has received relatively little attention - even though place attachment is thought to play a significant role in forming individual identity. Place attachment affects the decisions that individuals make with regards to social and environmental policies, lifestyle, and, in the corporate context, firmlevel policies. Because firms hire local CEOs and CFOs five to eight times more often than expected if geography were irrelevant to the matching process, the question of how managerial place attachment affects financial reporting outcomes is an important one. I investigate the effect of managerial place attachment on financial reporting quality in a sample of publicly traded U.S. firms. My findings indicate that firms with place attached CEOs display higher financial reporting quality, indicating a significant caretaking bond between CEO and stakeholders. CFOs, on the other hand, are marginally associated with lower financial reporting quality, indicating that they are more likely than CEOs to extract personal gain when they are local to their firm headquarters.
Show less - Date Issued
- 2020
- PURL
- http://purl.flvc.org/fau/fd/FA00013442
- Subject Headings
- Financial statements, Management, Chief executive officers, Chief financial officers, Place attachment
- Format
- Document (PDF)
- Title
- THREE ESSAYS ON CEO-BOARD SOCIAL CONNECTIONS AND CORPORATE POLICIES: AN INTERNATIONAL PERSPECTIVE.
- Creator
- Bhuyan, Md Nazmul Hasan, Javakhadze, David, Florida Atlantic University, Department of Finance, College of Business
- Abstract/Description
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The proposed study examines the effect of CEO-board social connections on corporate policies. Motivated by the independent board view and collaborative board view, I propose two opposing hypotheses explaining the effect of CEO-board connections on corporate policies: monitoring hypothesis and advising hypothesis. In my first essay, I validate the two competing hypotheses of CEO-board connections by investigating the effect of CEO-board connections on monitoring and advising role of the board,...
Show moreThe proposed study examines the effect of CEO-board social connections on corporate policies. Motivated by the independent board view and collaborative board view, I propose two opposing hypotheses explaining the effect of CEO-board connections on corporate policies: monitoring hypothesis and advising hypothesis. In my first essay, I validate the two competing hypotheses of CEO-board connections by investigating the effect of CEO-board connections on monitoring and advising role of the board, and firm valuation. I find that CEO-board connections have a negative effect on board monitoring and positive effect on board advising and firm valuation. The results are robust to endogeneity concerns and different model specifications. Disentangling the Channels, I also show that the predicted effect of CEO-board connections on board monitoring and advising have opposite effects on firm valuation. Lastly, I provide evidence that the effect of CEO-board connections on firm performance is stronger in firms with high growth opportunities.
Show less - Date Issued
- 2020
- PURL
- http://purl.flvc.org/fau/fd/FA00013515
- Subject Headings
- Chief executive officers, Boards of directors, International perspectives
- Format
- Document (PDF)
- Title
- THE IMPACT OF CEO PAST PROFESSIONAL EXPERIENCE AND SOCIAL CAPITAL ON CORPORATE POLICIES AND FIRM PERFORMANCE.
- Creator
- Faulkner, Matthew, Garcia-Feijoo, Luis, Florida Atlantic University, College of Business, Department of Finance
- Abstract/Description
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Increasing evidence suggests the personal traits of chief executive officers (CEOs) can influence corporate policies. We examine how one dimension, past professional experiences, can affect corporate payout policy. Exploiting exogenous CEO turnovers and future employment, we hypothesize that CEOs experiencing a distress event in their past career alter the corporate payout policy at their subsequent firm of employment. We discover that CEOs having experienced prior professional career...
Show moreIncreasing evidence suggests the personal traits of chief executive officers (CEOs) can influence corporate policies. We examine how one dimension, past professional experiences, can affect corporate payout policy. Exploiting exogenous CEO turnovers and future employment, we hypothesize that CEOs experiencing a distress event in their past career alter the corporate payout policy at their subsequent firm of employment. We discover that CEOs having experienced prior professional career distress are less likely to pay dividends and use repurchases and pay out lower levels for each type of payout. Additionally, when CEOs with distress do have a payout policy greater than zero dollars, there exists a preference toward the use of repurchases in the payout policy, adding to the literature of substitution and differences between the two forms of payout. We find that dividend smoothing is reduced by CEOs that have past professional distress.
Show less - Date Issued
- 2019
- PURL
- http://purl.flvc.org/fau/fd/FA00013305
- Subject Headings
- Chief executive officers, Social capital (Sociology), Experience, Dividends, Payouts
- Format
- Document (PDF)
- Title
- CEO SOCIAL CAPITAL AND STOCK PRICE INFORMATIVENESS: US AND INTERNATIONAL PERSPECTIVES.
- Creator
- Malinin, Artem, Garcia-Feijoo, Luis, Florida Atlantic University, Department of Finance, College of Business
- Abstract/Description
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In Essay 1, I investigate the association between CEOs’ social capital and stock price informativeness in a sample of US firms. After accounting for the fact that larger networks attract more analysts following, I find that firms with larger CEO social capital exhibit higher private information incorporation and hence more informative stock prices. Results are consistent for five different proxies for stock price informativeness. Furthermore, the positive association between social capital...
Show moreIn Essay 1, I investigate the association between CEOs’ social capital and stock price informativeness in a sample of US firms. After accounting for the fact that larger networks attract more analysts following, I find that firms with larger CEO social capital exhibit higher private information incorporation and hence more informative stock prices. Results are consistent for five different proxies for stock price informativeness. Furthermore, the positive association between social capital and informativeness is driven by more diverse networks, as measured by gender, nationality, education, or professional diversity. Overall, results suggest that private information existing in networks may result in markets that are more informationally efficient. In Essay 2, I show that CEOs’ social capital has a positive impact on stock price informativeness in an international sample. Different robustness and endogeneity tests confirm those results. Moreover, I find that factors present at the country level can mitigate or reinforce social capital’s impact on informativeness. I consider characteristics not observable within one country that can influence such relation around the world including legal, cultural, and developmental. I uncover that for more developed countries and those with a higher quality of institutions a positive impact of social connectedness is more pronounced. In addition, I show the importance of CEOs’ connections characteristics for their impact on stock price informativeness. I find that if CEOs’ connections come from developed countries or countries that have better formal and informal institutions which affect information transparency, CEOs’ social capital becomes more important for informativeness.
Show less - Date Issued
- 2022
- PURL
- http://purl.flvc.org/fau/fd/FA00013973
- Subject Headings
- Chief executive officers, Social capital (Sociology), Stocks--Prices
- Format
- Document (PDF)
- Title
- Corporate strategic reorientation and adjustment: A longitudinal analysis of the effects of top management teams.
- Creator
- Peyrefitte, Joseph Armand, Florida Atlantic University, Golden, Peggy A.
- Abstract/Description
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The impact of executive cognitive bases and values on corporate strategic change was examined in a longitudinal study of the computer hardware industry. Corporate strategic change was separated into pattern and magnitude dimensions as suggested by Ginsberg (1988). These dimensions complement the logic of Tushman and Romanelli (1985) who suggest that organizations proceed through long periods of stability or adjustment, punctuated by periods of metamorphic change or reorientation. I proposed...
Show moreThe impact of executive cognitive bases and values on corporate strategic change was examined in a longitudinal study of the computer hardware industry. Corporate strategic change was separated into pattern and magnitude dimensions as suggested by Ginsberg (1988). These dimensions complement the logic of Tushman and Romanelli (1985) who suggest that organizations proceed through long periods of stability or adjustment, punctuated by periods of metamorphic change or reorientation. I proposed that executive cognitive bases and values would be associated with strategic reorientation but not strategic adjustment since executive perceptions and responses are the internal driving forces that direct and redirect organizations (Romanelli & Tushman, 1988). Panel data analysis techniques were used to test the hypotheses developed in this study. Corporate strategic reorientation and adjustment were operationalized by changes in unrelated and related diversification, and changes in between-stage and within-stage vertical integration, respectively. The mean organization tenure and functional background heterogeneity of top management teams were used as proxies for executive cognitive bases and values. Results provided overall support for the hypotheses. Mean organization tenure was negatively related to unrelated diversification change, while neither mean organization tenure nor functional background heterogeneity were associated with related diversification change. Functional background heterogeneity was positively related to between-stage vertical integration change, however, contrary to expectations, it was negatively related to within-stage vertical integration change. These findings confirm and extend the literature which relates managerial characteristics to strategic change.
Show less - Date Issued
- 1996
- PURL
- http://purl.flvc.org/fcla/dt/12449
- Subject Headings
- Executives, Chief Executive Officers, Strategic Planning, Organizational Change, Organizational Behavior, Corporate Culture, Corporate Reorganizations
- Format
- Document (PDF)
- Title
- Antecedents and consequences of pay disparity between CEO and non-CEO executives.
- Creator
- Pissaris, Seema., Florida Atlantic University, College of Business, Department of Management
- Abstract/Description
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This dissertation investigates the antecedents and consequences to pay disparity between the CEO and non-CEO executives from an equity-based perspective. While the principles of agency theory suggest that CEOs are granted higher compensation packages to better align their motives to those of the firm's shareholders, empirical research has not supported a positive relationship between rising CEO pay and firm performance. Some results even suggest a negative relationship. This dissertation...
Show moreThis dissertation investigates the antecedents and consequences to pay disparity between the CEO and non-CEO executives from an equity-based perspective. While the principles of agency theory suggest that CEOs are granted higher compensation packages to better align their motives to those of the firm's shareholders, empirical research has not supported a positive relationship between rising CEO pay and firm performance. Some results even suggest a negative relationship. This dissertation argues that if organizational outcomes are determined by the integrated skills and talents of its dominant coalition, and if the management of a firm's trajectory is a shared process, then, the disparity in rewards between the CEO and those that work closest to him becomes an important area of study., The dissertation investigates the antecedents of pay disparity and proposes that the quality of a firm's governance marked by independent boards as well as higher levels of blockholders will be more likely to temper and better align the CEO's compensation and thereby reduce pay disparity. Empirical results support the major propositions as firms with independent Chairman of the Board, fewer interlocking directors, and higher levels of blockholders were found to have lower levels of pay disparity between the CEO and non-CEO executives. Pay disparity was tested both at the firm level and at the individual executive level and both were found have a significant effect on non-CEO executive turnover for up to two years., Central to the dissertation is a moderation model which proposes that pay disparity has a profound effect on an executive team's ability to integrate its diverse experience and educational background, and consequently, its capacity to respond strategically to its changing competitive landscape. The study examines the education, age, tenure and functional background of top management teams of Fortune 500 firms and finds support for the assertion that the positive relationship between heterogeneously composed teams and firm performance is contingent on rewards equality between the CEO and balance of the top team membership. The findings suggest that higher levels of pay disparity attenuate the negative aspects of cognitive diversity serving to impede the firm's competitive performance.
Show less - Date Issued
- 2008
- PURL
- http://purl.flvc.org/FAU/58009
- Subject Headings
- Chief executive officers, Salaries, etc, Corporate governance, Compensation management, Managerial economics
- Format
- Document (PDF)
- Title
- CEO departure and discretionary accounting choices.
- Creator
- Mortimer, John William, Florida Atlantic University, Hopwood, William S.
- Abstract/Description
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Dechow and Sloan [1991] investigate the hypothesis that CEOs, during their final years of office (the "horizon" years), manage discretionary expenditures to improve short-term earnings performance. Using a sample of 261 firm-years, this study extends the Dechow and Sloan model by including additional control variables. It also examines whether the discretionary components of earnings (discretionary accruals, discretionary revenue, and capital expenditures) provide departing CEOs a monetary...
Show moreDechow and Sloan [1991] investigate the hypothesis that CEOs, during their final years of office (the "horizon" years), manage discretionary expenditures to improve short-term earnings performance. Using a sample of 261 firm-years, this study extends the Dechow and Sloan model by including additional control variables. It also examines whether the discretionary components of earnings (discretionary accruals, discretionary revenue, and capital expenditures) provide departing CEOs a monetary incentive (bonuses) to manipulate these income factors. The general results of this study do not support the hypothesis that departing CEOs have a greater monetary incentive than incumbent CEOs to manage discretionary earnings to maximize their bonus schemes. A possible reason this hypothesis is not supported may be due to the fact that previous research has treated incumbent and departing CEOs as separate, homogeneous samples a treatment that the extant income-smoothing and CEO turnover research suggests may be flawed. Income smoothing literature provides evidence that some incumbent CEOs manipulate earnings to a predetermined target to avoid a "ratcheting" of expectations while CEO turnover research suggests that the "relay" process mitigates some departing CEOs' manipulations of earnings. Since agency theory predicts that management of accounting earnings will vary between groups of incumbent and departing CEOs, as well as within these two groups, the present study partitions the sample on the median change in operating cash flows for departing CEOs. This study finds evidence that departing CEOs in the above-median partition do increase income-enhancing discretionary accruals in their final year with the firm, and they have a significant economic incentive to do so. However, there is apparently no economic incentive for departing CEOs with an above-median change in operating cash flows to reduce discretionary revenue or capital expenditures.
Show less - Date Issued
- 2001
- PURL
- http://purl.flvc.org/fcla/dt/11974
- Subject Headings
- Chief Executive Officers--Salaries, etc, Accrual Basis Accounting, Disclosure in Accounting, Incentives in Industry
- Format
- Document (PDF)
- Title
- The link between CEO compensation, CEO resource allocation decisions, and firm performance.
- Creator
- Dahmus, Sue Ann., Florida Atlantic University, Golden, Peggy A.
- Abstract/Description
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The relationship between the compensation (total and percent at risk) of 240 CEOs from 1986 to 1991, and several CEO resource allocation decisions (R&D, advertising, employees, business segments, and acquisitions) and subsequent firm performance was explored. The firms (Forbes-CEOs of the largest 800 public companies) had the same CEO for the entire period. The resource allocation decisions and the measures of firm performance (ROA, ROE, ROI, ROS, cashflow/sales, and stock return) were...
Show moreThe relationship between the compensation (total and percent at risk) of 240 CEOs from 1986 to 1991, and several CEO resource allocation decisions (R&D, advertising, employees, business segments, and acquisitions) and subsequent firm performance was explored. The firms (Forbes-CEOs of the largest 800 public companies) had the same CEO for the entire period. The resource allocation decisions and the measures of firm performance (ROA, ROE, ROI, ROS, cashflow/sales, and stock return) were obtained from COMPUSTAT. The number of acquisitions was obtained from Mergers and Acquisitions. The percent of CEO compensation at risk was found to be associated with the change in R&D and the change in the number of business segments. Total CEO compensation was found to be positively associated with the change in advertising expenses, the change in the number of employees, and the change in the number of acquisitions. A principal components analysis indicated that the performance measures loaded on two factors, representing firm profitability and returns to stockholders. The relationship between CEO compensation and firm performance was explored using two stage simultaneous equations. The model considered the effects of prior firm performance on the relationship. The amount of total CEO compensation and the percent of CEO compensation at risk were found to be positively associated with subsequent firm profitability for several years. Total CEO compensation and the percent of CEO compensation at risk were positively associated with subsequent return to stockholders in one year. However, the results were not consistent across all the years of the study and the amounts of firm performance explained by the models were small.
Show less - Date Issued
- 1994
- PURL
- http://purl.flvc.org/fcla/dt/12393
- Subject Headings
- Chief executive officers--Salaries, etc--United States, Executives--Salaries, etc--United States, Incentives in industry--United States, Executive ability, Industrial productivity--Evaluation
- Format
- Document (PDF)
- Title
- Do “Superstar” CEOs Impair Auditors’ Independence and Professional Skepticism?.
- Creator
- Harvin, Oscar, Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
- Abstract/Description
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The study examines the potential threat to an auditor’s independence in fact which may result from the extraordinarily favorable personal reputation (superstar status) of an audit client’s CEO This potential threat to an auditors’ independence is the result of a halo effect bias which can distort an individual’s judgment and behavior Accounting firms use a business risk audit approach which involves conducting a strategic risk assessment which assesses the overall threats to the business...
Show moreThe study examines the potential threat to an auditor’s independence in fact which may result from the extraordinarily favorable personal reputation (superstar status) of an audit client’s CEO This potential threat to an auditors’ independence is the result of a halo effect bias which can distort an individual’s judgment and behavior Accounting firms use a business risk audit approach which involves conducting a strategic risk assessment which assesses the overall threats to the business model of an audit client Prior research has demonstrated that the strategic risk assessment can bias the judgment of auditors pertaining to financial account level risk assessments For example, the Bernie Madoff Ponzi scheme demonstrated how an extraordinarily well respected individual with superstar status can distort the judgment of knowledgeable and normally skeptical individuals An experiment was conducted to examine the potential threat of a superstar CEO on an auditor’s independence as demonstrated by the ability to distort the judgment of the auditor during the performance of the strategic risk assessment In addition, the experiment was designed to examine whether the halo cognitive bias can lessen the impact that an auditor’s professional skepticism has on his or her judgment and behavior during the audit of a client’s financial statement Unlike other studies which have sought only to demonstrate that a cognitive bias exist which impairs auditor judgment; the study also examined whether the influence of a halo effect bias can be mitigated by the formal rating of audit evidence in a similar manner that was used by Embu and Finley (1977) to successfully mitigate a framing effect The experiment did not support the main hypothesis of the study that auditors assess the strategic risk at a lower risk level for firms that employ a superstar CEO than for those whom employ a non-superstar CEO This result may primarily be due to the inability of the scenario used in the experiment to sufficiently differentiate the characteristics of the superstar and non-superstar CEO Without establishing that the participants’ judgment was being distorted by a superstar CEO; the other hypotheses which involved testing a debiasing method to mitigate the halo effect caused by a superstar CEO and investigating whether a halo effect reduces the impact that auditors’ trait skepticism level has on their judgment could not be properly tested
Show less - Date Issued
- 2016
- PURL
- http://purl.flvc.org/fau/fd/FA00004771
- Subject Headings
- Chief executive officers--Professional ethics, Accounting--Moral and ethical aspects, Accountants--Professional ethics, Auditors--Psychology, Behaviorism (Psychology), Industrial management
- Format
- Document (PDF)