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Conference Paper: Do Clawback Provisions influence Capital Investments?

TitleDo Clawback Provisions influence Capital Investments?
Authors
Joo, JHChan, LHLBiddle, GC
Issue Date2017
PublisherAmerican Accounting Association.
Citation
American Accounting Association Annual Meeting, San Diego, CA, 5-9 August 2017 How to Cite?
AbstractWe present evidence that clawback adoptions influence capital investment mix via managerial compensation incentives. Specifically, we find for a propensity-matched sample of 931 voluntary clawback adopters that capital investments shift away from R&D and toward capital expenditures, and toward acquisitions for firms with enabling liquidity, consistent with clawback effects on earnings-linked compensation. Corroborating evidence confirms these effects to be positively related to performance-based pay, growth opportunities, and invariant to risk-toleration incentives, with firms adopting clawbacks also exhibiting capital over-investment. This evidence is timely given a pending SEC rule that would mandate clawbacks for all firms listing on US exchanges.
Persistent Identifierhttp://hdl.handle.net/10722/245808

 

DC FieldValueLanguage
dc.contributor.authorJoo, JH-
dc.contributor.authorChan, LHL-
dc.contributor.authorBiddle, GC-
dc.date.accessioned2017-09-18T02:17:16Z-
dc.date.available2017-09-18T02:17:16Z-
dc.date.issued2017-
dc.identifier.citationAmerican Accounting Association Annual Meeting, San Diego, CA, 5-9 August 2017-
dc.identifier.urihttp://hdl.handle.net/10722/245808-
dc.description.abstractWe present evidence that clawback adoptions influence capital investment mix via managerial compensation incentives. Specifically, we find for a propensity-matched sample of 931 voluntary clawback adopters that capital investments shift away from R&D and toward capital expenditures, and toward acquisitions for firms with enabling liquidity, consistent with clawback effects on earnings-linked compensation. Corroborating evidence confirms these effects to be positively related to performance-based pay, growth opportunities, and invariant to risk-toleration incentives, with firms adopting clawbacks also exhibiting capital over-investment. This evidence is timely given a pending SEC rule that would mandate clawbacks for all firms listing on US exchanges.-
dc.languageeng-
dc.publisherAmerican Accounting Association. -
dc.relation.ispartofAmerican Accounting Association Annual Meeting-
dc.titleDo Clawback Provisions influence Capital Investments?-
dc.typeConference_Paper-
dc.identifier.emailJoo, JH: jeongjoo@hku.hk-
dc.identifier.emailChan, LHL: lchan@business.hku.hk-
dc.identifier.emailBiddle, GC: biddle@hku.hk-
dc.identifier.authorityJoo, JH=rp01796-
dc.identifier.authorityChan, LHL=rp01048-
dc.identifier.authorityBiddle, GC=rp00230-
dc.identifier.hkuros277051-
dc.publisher.placeSan Diego, CA-

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