Executive Turnover Following Option Backdating Allegations

• 成果类型: Article
• 署名作者: Efendi, Jap; Files, Rebecca; Ouyang, Bo; Swanson, Edward P.
• 署名单位: University of Texas System; University of Texas Arlington; University of Texas System; University of Texas Dallas; Texas A&M University System; Texas A&M University College Station
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-50273
• 发表日期: 2013
• 页码: 75-105
• 关键词: earnings restatements; MANAGEMENT TURNOVER; ceo turnover; equity incentives; COMPENSATION; IMPACT; BOARD; irregularities; performance; awards

摘要

We find that the likelihood of forced turnover in the CEO and CFO positions is significantly higher for firms in the aftermath of option backdating than in propensity-score matched control firms. Forced turnover occurs in about 36 percent of the accused firms. The forced turnover rates for CEOs and CFOs are similar and several times higher than normal. The displaced managers are further punished by the managerial labor market, as they are much less likely than control firm managers to be rehired at comparable positions. We also find that backdating firms restructure CEO compensation to rely less on stock options. Finally, we learn the higher turnover extends to the General Counsel. While boards are often viewed as unresponsive to criticisms involving executive compensation, they did respond quite decisively to option backdating allegations and the accompanying adverse publicity.