Business Commons^™

Does Investor Protection Regime Affect The Effectiveness Of Outside Directorship On The Board?, Jagdish Pathak, Jerry Sun

Odette School of Business Publications

Since the Sarbanes-Oxley Act was enacted in U.S., there has been a general tendency to globally harmonize regulations and practices of board governance. The purpose of this study is to compare among countries how well the board of directors constrains earnings management. Using a sample of firms from 23 countries, we document some evidence that higher outside directorship on the board is associated with lower earnings management in the international context. We also find that there is no significant difference in the effectiveness of board outside directorship in constraining earnings management between high and low investor protection countries. Our findings …

The Effect Of Analyst Coverage On Accounting Conservatism, Jerry Sun, Guoping Liu

Odette School of Business Publications

Purpose – The purpose of this paper is to examine whether high analyst coverage increases or decreases accounting conservatism.

Design/methodology/approach – Sample firms were selected from the Compustat and I/B/E/S databases for years 1989-2006. The authors used both accrual-based and market-value-based measures of accounting conservatism, also the extent to which negative cash flow from operations is more timely recognized via accruals than positive cash flow from operations to measure accounting conservatism. The regression analyses are conducted to test the hypotheses.

Findings – Strong evidence was found that analyst coverage is positively associated with accounting conservatism. The results suggest that firms …

The Effect Of Compensation Committee Quality On The Association Between Ceo Cash Compensation And Accounting Performance, Jerry Sun, Steven Cahan

Odette School of Business Publications

We examine the effect of compensation committee quality on the association between CEO cash compensation and accounting earnings and the moderating effects of growth opportunities and earnings status.

Research Findings/Insights: Using a sample of 812 US firms, we find that CEO cash compensation is more positively associated with accounting earnings when firms have high compensation committee quality. We also find that the positive effect of compensation committee quality on the association between CEO cash compensation and accounting earnings is less for high growth firms or loss-making firms.Theoretical

Implications: We contribute to the agency-based research on CEO compensation by: 1) directly …

What Happens To Ceo Compensation Following Turnover And Succession?, Eahab Elsaid, Wallace N. Davidson Iii

Odette School of Business Publications

When boards hire CEOs, the board and successor CEO have an opportunity to redesign the predecessor's compensation contract. The CEO's relative bargaining power will influence the outcome of compensation negotiations. Analyzing 508 successions, we find that total compensation of successor CEOs increases by 69% over their predecessor, but the structure of successor compensation is heavily influenced by the predecessors’ contracts. When the board's bargaining power is large, successors have a greater proportion of pay-at-risk and smaller proportion of salary. When the CEO's bargaining power is large, there is a smaller proportion of pay-at-risk and relatively greater proportion of salary.