Managerial opportunism? Evidence from directors' and officers' insurance purchases

• 成果类型: Article
• 署名作者: Chalmers, JMR; Dann, LY; Harford, J
• 署名单位: University of Oregon
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/1540-6261.00436
• 发表日期: 2002
• 页码: 609-636
• 关键词: initial public offerings; long-run performance; STOCK OPTION AWARDS; ISSUES PUZZLE; corporate; DISCLOSURES; companies

摘要

We analyze a sample of 72 IPO firms that went public between 1992 and 1996 for which we have detailed proprietary information about the amount and cost of D&O liability insurance. If managers of IPO firms are exploiting superior inside information, we hypothesize that the amount of insurance coverage chosen will be related to the post-offering performance of the issuing firm's shares. Consistent with the hypothesis, we find a significant negative relation between the three-year post-IPO stock price performance and the insurance coverage purchased in conjunction with the IPO. One plausible interpretation is that, like insider securities transactions, D&O insurance decisions reveal opportunistic behavior by managers. This provides some motivation to argue that disclosure of the details of D&O insurance decisions, as is required in some other countries, is valuable.