We are pleased to invite you to the next Baltic Economic Association Online Research Seminars and are delighted to welcome Ronald Masulis (UNSW School of Business, University of New South Wales). Ron is the Scientia Professor of Finance and AGSM Scholar at the UNSW Business School, University of New South Wales. Ron received his MBA and PhD from the University of Chicago. His published research spans financial institutions, market microstructure, international finance, venture capital, law and economics and corporate governance topics such as mergers and acquisitions, boards of directors, executive compensation, ownership structure and business groups. Among financial economists worldwide, he has one of the highest sustained rates of top tier publications and frequency of citations across a range of top finance journals and the Journal of Accounting and Economics and Journal of Law and Economics.
🔉 Speaker: Ronald Masulis (UNSW School of Business, University of New South Wales)
📆 Date: January 26th, 2023
⏰ Time: 10:00 a.m.
📺 Location: Online https://bit.ly/3HmOWJk
Meeting ID: 842 9000 6375
We study how reputation incentives of influential independent directors (those holding multiple directorships) affect CEO compensation and firm financial reporting decisions. We find that CEO equity-based incentives, measured by CEO delta, vega and the number of equity grants are positively related to these directors’ reputation incentives. These director reputation incentives also mitigate the perverse CEO incentives to inflate earnings, which arise from such high-powered compensation structures, by motivating increased board monitoring to limit discretionary accruals and real activity-based earnings management. These findings are invariant to endogeneity adjustments under multiple approaches, including exogenous changes in reputation incentives.