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Full-Text Articles in Law
The Economic Impact Of Backdating Of Executive Stock Options, M. P. Narayanan, Cindi A. Schipani, H. Nejat Seyhun
The Economic Impact Of Backdating Of Executive Stock Options, M. P. Narayanan, Cindi A. Schipani, H. Nejat Seyhun
Michigan Law Review
This Article discusses the economic impact of legal, tax, disclosure, and incentive issues arising from the revelation of dating games with regard to executive option grant dates. It provides an estimate of the value loss incurred by shareholders of firms implicated in backdating and compares it to the potential gain that executives might have obtained through backdating. Using a sample of firms that have already been implicated in backdating, we find that the revelation of backdating results in an average loss to shareholders of about 7%. This translates to about $400 million per firm. By contrast, we estimate that the …
Young Associates In Trouble, William D. Henderson, David Zaring
Young Associates In Trouble, William D. Henderson, David Zaring
Michigan Law Review
Large law firms have reputations as being tough places to work, and the larger the firm, the tougher the firm. Yet, notwithstanding the grueling hours and the shrinking prospects of partnership, these firms perennially attract a large proportion of the nation's top law school graduates. These young lawyers could go anywhere but choose to work at large firms. Why do they do so if law firms are as inhospitable as their reputations suggest? Two recent novels about the lives of young associates in large, prestigious law firms suggest that such a rational calculation misapprehends the costs. Law professor Kermit Roosevelt's …
Sarbanes-Oxley And The Cross-Listing Premium, Kate Litvak
Sarbanes-Oxley And The Cross-Listing Premium, Kate Litvak
Michigan Law Review
This article tests whether the Sarbanes-Oxley Act ("SOX") affected the premium that investors are willing to pay for shares of foreign companies cross-listed in the United States. I find that from year-end 2001 (pre-SOX) to year-end 2002 (after SOX adoption), the Tobin's q and market/book ratios of foreign companies subject to SOX (cross-listed on levels 2 or 3) declined significantly, relative to Tobin's q and market/book ratios of both (i) matching non-cross-listed foreign companies from the same country, the same industry, and of similar size, and (ii) cross-listed companies from the same country that are not subject to SOX (listed …