Documents disponibles écrits par cet auteur

Effects of litigation risk on board oversight and CEO incentive pay / Volker Laux in Management science, Vol. 56 N° 6 (Juin 2010) 

Public ISBD [article]  in Management science > Vol. 56 N° 6 (Juin 2010) . - pp. 938-948 Titre : Effects of litigation risk on board oversight and CEO incentive pay Type de document : texte imprimé Auteurs : Volker Laux, Auteur Année de publication : 2010 Article en page(s) : pp. 938-948 Note générale : Management Langues : Anglais (eng) Mots-clés : Corporate  governance  Director  liability  Board  oversight  CEO  incentive  pay  Earnings  management Index. décimale : 658 Organisation des entreprises. Techniques du commerce Résumé : Various commentators have praised the WorldCom and Enron settlements for holding outside directors personally liable, arguing that heightened director liability will induce greater board oversight. This paper shows that the connection between director liability and board behavior is more subtle, because directors have multiple means to respond to an increase in liability exposure: They can increase oversight to prevent accounting manipulation and/or reduce performance-based CEO pay to mitigate the CEO's ex ante incentive to engage in manipulation. These two decisions are interrelated, implying that the effects of director liability on board oversight and CEO incentive pay are ambiguous. In particular, the model predicts that, for firms in which board oversight is difficult and costly (e.g., large firms with complex business operations), a stricter legal environment for directors leads to a lower level of board oversight, lower CEO incentive pay, and lower shareholder value. DEWEY : 658 ISSN : 0025-1909 En ligne : http://mansci.journal.informs.org/content/56/6.toc [article] Effects of litigation risk on board oversight and CEO incentive pay [texte imprimé] / Volker Laux, Auteur . - 2010 . - pp. 938-948. Management Langues : Anglais (eng) in Management science > Vol. 56 N° 6 (Juin 2010) . - pp. 938-948 Mots-clés : Corporate  governance  Director  liability  Board  oversight  CEO  incentive  pay  Earnings  management Index. décimale : 658 Organisation des entreprises. Techniques du commerce Résumé : Various commentators have praised the WorldCom and Enron settlements for holding outside directors personally liable, arguing that heightened director liability will induce greater board oversight. This paper shows that the connection between director liability and board behavior is more subtle, because directors have multiple means to respond to an increase in liability exposure: They can increase oversight to prevent accounting manipulation and/or reduce performance-based CEO pay to mitigate the CEO's ex ante incentive to engage in manipulation. These two decisions are interrelated, implying that the effects of director liability on board oversight and CEO incentive pay are ambiguous. In particular, the model predicts that, for firms in which board oversight is difficult and costly (e.g., large firms with complex business operations), a stricter legal environment for directors leads to a lower level of board oversight, lower CEO incentive pay, and lower shareholder value. DEWEY : 658 ISSN : 0025-1909 En ligne : http://mansci.journal.informs.org/content/56/6.toc