Explaining CEO retention in misreporting firms
| Autor: | Jun Yang, Messod Daniel Beneish, Cassandra D. Marshall |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Economics and Econometrics
050208 finance ComputingMilieux_THECOMPUTINGPROFESSION Strategy and Management Information sharing 05 social sciences 050201 accounting Microeconomics Accounting 0502 economics and business Social relationship Insider trading Business Proxy (statistics) Chief executive officer Finance Stock (geology) |
| Zdroj: | Journal of Financial Economics. 123:512-535 |
| ISSN: | 0304-405X |
| Popis: | We propose a framework that advances our understanding of Chief Executive Officer (CEO) retention decisions in misreporting firms. Consistent with economic intuition, outside directors are more likely to fire (retain) CEOs when retention (replacement) costs are high relative to replacement (retention) costs. When the decision is ambiguous because neither cost dominates, outside directors are more likely to retain the CEO when they both benefit from selling stock in the misreporting period. We show that joint abnormal selling captures director–CEO alignment incrementally to biographical overlap. This new proxy operationalizes information sharing and trust, making it useful for studying economic decision-making embedded in social relationships. |
| Databáze: | OpenAIRE |
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