5 research outputs found
A Study on the Effect of the Mandated Change In Board Composition on Firm Performance & Ceo Compensation
No full textIn this dissertation, I examine the long-run effect of the 2003 mandated change in board composition on firm performance and CEO compensation. In the first essay, I examine the impact of changes in firm performance to shed light on the debate between agency and insider-knowledge theorists. Agency theorists argue that installing an independent board would increase monitoring of management, thereby enhancing firm performance. In contrast, the insider-knowledge hypothesis suggests that an independent board lacks valuable insider information for effective advisory functions and, hence, is detrimental to firm performance. In the second essay, I investigate the effect of the mandate on CEO compensation to shed light on the debate between two agency viewpoints: the managerial power view and the complementarity view. The former suggests that total CEO compensation will decrease to better align CEOs’ interests with those of shareholders. The latter argues that total CEO compensation will increase following the mandate to compensate executives for bearing firm-specific risks inherent in performance-based incentive packages. Using a difference-in-difference approach, I find a positive relationship between board independence and firm performance in the first essay, consistent with agency theory. I also find a positive relationship between board independence and CEO compensation in the second essay, along with an increase in pay for-performance sensitivity, consistent with the complementarity view
The Effect of Board Composition on Long-Term Firm Performance: NASDAQ versus NYSE
No full textIn response to multiple corporate scandals in the closing years of the 20th century, the SEC implemented board-independence requirements in 2003 for companies listed on NASDAQ and NYSE. According to the prior research on principal-agent theory and the effects of board composition on financial performance, increased monitoring and improved oversight mechanisms stemming from board independence enhance the long-term success of publicly traded companies. This study aims to determine whether the 2003 independent-board mandate affected the performance of U.S. companies traded on NASDAQ differently from those traded on NYSE. We expected the more stringent measures adopted for NYSE firms to have a greater effect on long-term firm performance than the less stringent measures adopted for NASDAQ firms. We conducted the study using a sample of 381 U.S. companies traded on NASDAQ and 857 U.S. companies traded on NYSE over the period from 1997 to 2012. We examined the information utilizing a difference-in-difference-in-difference research design and assessed company performance using Tobin’s Q. Our findings indicate that independent boards significantly improved the long-term financial performance of companies listed on NYSE but had no impact on companies traded on NASDAQ. Our contribution to the body of research is the discovery that the 2003 board-independence standards adopted by NASDAQ impacted long-term firm performance differently than those adopted by NYSE.
Keywords: board composition, financial performance, firm performance, independent boards, NASDAQ, NYSE, Tobin’s
The Effect of Strengthened Corporate Governance on Firm Performance in the United States
No full textIn response to the accounting scandals of the late 1990s, regulators adopted changes to corporate governance rules in 2003 in an effort to restore investor confidence in the stock market. The purpose of this study is to determine whether the changes to board leadership structure imposed on U.S. companies affected firm performance as measured by operating return on assets. This study was conducted with a sample of 857 publicly traded companies listed on the New York Stock Exchange and 11,632 firm-year observations over the period from 1997 to 2012. Using a difference-in-difference estimator and multivariate analysis, we found a positive and significant indication that changes to board leadership structure improved the long-run performance of firms that were previously insider controlled. The results of this study indicate that some firms were not ideally structured prior to 2003 when the changes in corporate governance rules took effect for publicly traded companies listed on the New York Stock Exchange
The Effect of Strengthened Monitoring and Oversight Mechanisms on U.S. Firms Listed on NASDAQ
No full textAgency theory and conventional wisdom suggest that strengthened monitoring and oversight mechanisms are necessary to align the actions of management with the interests of shareholders, which should be to maximize shareholder wealth. In 2003, legislators and regulators strengthened corporate governance with a series of laws and regulations in response to a number of corporate scandals in the late 1990s. The purpose of this study is to determine how strengthened monitoring and oversight mechanisms affected the performance of U.S. companies listed with NASDAQ. In conjunction with the agency view and conventional wisdom, we expect strengthened corporate governance to reduce agency problems and costs and increase firm performance. We conducted the study with a sample of 381 firms and 5,005 firm-year observations from U.S. companies trading on NASDAQ over the period 1997-2012. We analyzed the data using a difference-in-difference methodology and found that most firms were not affected by the 2003 changes to NASDAQ rules. The results are consistent with the window-dressing view that suggests managers retained their influence over the board and appointed directors who technically met the new requirements but were sympathetic to management, giving the impression that changes were made. Keywords: agency view; corporate governance; firm performance; monitoring; oversight; NASDAQ; difference-in-difference methodology; window-dressing view DOI: 10.7176/RJFA/12-16-02 Publication date:August 31st 2021
A simple construction of positive loops of Legendrians
No full textWe construct positive loops of Legendrian submanifolds in several instances. In particular, we partially recover G. Liu's result stating that any loose Legendrian admits a positive loop, under some mild topological assumptions on the Legendrian. Moreover, we show contractibility of the constructed loops under an extra topological assumption.We are grateful to R. Casals, V. Colin, V. Ginzburg, G.Liu and A. del Pino, for useful discussions. The first author is grateful to the Marie Curie Research programme “Indo European collaboration on moduli spaces”
that allowed him to visit ICMAT during the development of this project. The first author is also thankful to ICTP, Trieste (Italy), where part of this work was carried out when the author visited there as Simons associate. Second and third authors are supported by the Spanish National Research Projects SEV-2015-0554, MTM2016-79400-P and MTM2015-72876-EXP. Finally, we want to mention the good work of the referee. He has contributed to significantly improve the grammar and mathematical readability of this article
