We contribute to the scant literature on the relation betweencompensation to audit committee (AC) directors and AC effectiveness by focusingon the total excess compensation, i.e., thedifference between the actual and the predicted total mean compensation. We posit that this refined measure of compensationbetter captures the AC director’s incentives to be more or less effective inmonitoring financial reporting quality than examining the level of totalcompensation. Using a sample of S&P 1500 firms, we find thatfinancial reporting quality is lower, i.e., lower accrual quality and greaterfinancial statement errors when AC directors earn negative excesscompensation. On the other hand, financial reporting quality is higher, i.e.,lower likelihood of earnings manipulation and fraud when AC directorsearn positive excess compensation. Further, measures of realactivities management based on combinations of abnormal discretionary expenses,abnormal production, and abnormal cash flows are also lower when AC directorsearn positive excess compensation. Further, the mean level of directorcompensation by itself is not significantly associated with financial reportingquality, underscoring the importance of focusing on excess compensation todirectors. Overall, the results reassureregulators, investors, boards of directors, and others that paying above-marketcompensation to AC directors does not necessarily impair financial reportingquality. However, underpaying AC directors undermines directors’ motivation toconstrain managerial opportunism.
Follow online HERE

Organizers : Prof. Alessandro Bucciol (Università di Verona), Prof. Giacomo De Luca (unibz) e Prof. Francesco Ravazzolo (unibz)

ROOM C 1.01

10:00-10:30 Welcome speach

10:30-11:00 Andrea Xamo (Università di Verona): "Italian municipalities and the 1902 Dazio Consumo reform"

11:00-11:30 Umberto Nizza (Università di Verona): “Should I stay or should I go? Senatorial absenteeism and the determinants of lawmaking productivity”

11:30-12:00 Pia Schilling (Free University of Bozen-Bolzano): “Starting off on the right foot - Language Learning Classes and the Educational Success of Immigrant Children”

ROOM E 4.11

12:30-13:30 Prof. Tommaso Nannicini (Università Bocconi): Fighting Populism on its own Turf: Experimental Evidence

ROOM E 3.31

15:00-15:30 Sara Boni (Free University of Bozen-Bolzano): “Private EquityBuyouts and Productivity: Firm-level Evidence from Italy”

15:30-16:00 Enock Desmond Opoku (Università di Verona): "Examining the nexusbetween Personality, disasters, and economic behaviour"

16:00-16:30 Amie Jobe (Università di Verona, online): "Structuraltransformation and the effects of sectoral shift on the labour market outcomesin Africa"

16:30-17:00 Rebecca McNeill Couto Da Silva (FreeUniversity of Bozen-Bolzano, online): “Financial Decisions, Race, and PoliticalBiases: Experimental Evidence from Brazil”

We examine the impact of the new lease standard (ASC842) on credit markets. We show that, following the adoption of ASC 842, firmsthat rely heavily on operating leases (i.e., high lease intensity firms) experience a decline in syndicated loan spreads. This decline is morepronounced when firms are financially distressed, when syndicate lead arrangersare relatively inexperienced and when the uncertainty surrounding operatinglease assets and liabilities in the pre-period is higher. This decline in loanspreads is in contrast with the concerns voiced by firms and some politicianswho lobbied heavily against lease capitalization. We also document a decline inthe secondary bond market yield spreads of high lease intensity firms relativeto low lease intensity firms, which is more pronounced for speculative, lowmaturity, bonds. These changes in the level and term structure of bond yieldsare consistent with a decline in uncertainty regarding firms’ asset values anddefault barrier, and with a resulting reduction in transparency spreads (Duffieand Lando 200; Giesecke 2006). 

Follow online HERE