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CFOs versus CEOs: Equity Incentives and Crashes
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TLDR
In this paper, the authors used a large sample of U.S. firms for the period 1993-2009 and found that the sensitivity of a chief financial officer's (CFO) option portfolio value to stock price is significantly and positively related to the firm's future stock price crash risk.Abstract:
Using a large sample of U.S. firms for the period 1993-2009, we provide evidence that the sensitivity of a chief financial officer’s (CFO) option portfolio value to stock price is significantly and positively related to the firm’s future stock price crash risk. In contrast, we find only weak evidence of the positive impact of chief executive officer option sensitivity on crash risk. Finally, we find that the link between CFO option sensitivity and crash risk is more pronounced for firms in non-competitive industries and those with a high level of financial leverage.read more
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Corporate Social Responsibility and Stock Price Crash Risk
Yongtae Kim,Haidan Li,Siqi Li +2 more
TL;DR: In this article, the authors investigated whether corporate social responsibility mitigates or contributes to stock price crash risk and found that firms' CSR performance is negatively associated with future crash risk after controlling for other predictors of crash risk.
Accounting Conservatism and Stock Price Crash Risk: Firm-level Evidence.
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Stock Price Synchronicity, Crash Risk, and Institutional Investors
Heng An,Ting Zhang +1 more
TL;DR: This paper found that stock price synchronicity and crash risk are negatively related to the firm's ownership by dedicated institutional investors, which have strong incentive to monitor due to their large stake holdings and long investment horizons.
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Institutional investor stability and crash risk: Monitoring versus short-termism?
Jeffrey L. Callen,Xiaohua Fang +1 more
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Excess Perks and Stock Price Crash Risk: Evidence from China
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References
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Journal ArticleDOI
Theory of the firm: Managerial behavior, agency costs and ownership structure
TL;DR: In this article, the authors draw on recent progress in the theory of property rights, agency, and finance to develop a theory of ownership structure for the firm, which casts new light on and has implications for a variety of issues in the professional and popular literature.
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Management Ownership and Market Valuation: An Empirical Analysis
TL;DR: This article investigated the relationship between management ownership and market valuation of the firm, as measured by Tobin's Q. In a 1980 cross-section of 371 Fortune 500 firms, they found evidence of a significant nonmonotonic relationship.
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The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems
TL;DR: The last two decades indicate corporate internal control systems have failed to deal effectively with these changes, especially slow growth and the requirement for exit as mentioned in this paper, which is a major challenge for Western firms and political systems as these forces continue to work their way through the worldwide economy.
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Detecting Earnings Management
TL;DR: In this paper, the authors evaluate alternative models for detecting earnings management by comparing the specification and power of commonly used test statistics across the measures of discretionary accruals generated by each model.
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Performance Pay and Top Management Incentives
Kevin Murphy,Michael C. Jensen +1 more
TL;DR: For example, the authors estimates of the pay-performance relation (including pay, options, stockholdings, and dismissal) for chief executive officers indicate that CEO wealth changes $3.25 for every $1,000 change in shareholder wealth.