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Academic SeminarDo Clawback Adoptions Influence Capital Investment Mix?

  • Date
  • 2018-09-18 ~ 2018-09-18
  • Time
  • 16:00 ~ 17:30
  • Place
  • Building 9, 7th #9701
  • Department
  • School of Management Engineering
  • Major
  • Accounting
We would like to invite you to participate in Management Engineering (ME) Seminar.

1. When: September 18th (Tuesday), 16:00 ~ 17:30
2. Where: Building 9, 7th #9701
3. Speaker: Prof. Joo, Jeong Hwan (University of Hong Kong)
4. Topic: Do Clawback Adoptions Influence Capital Investment Mix?
5. Research field: Accounting

We present evidence that voluntary clawback provision adoptions influence capital investment mix and efficiency consistent with managerial compensation incentives. Specifically, we predict and find that for firms with higher proportions of performance-linked annual pay, capital investments shift away from R&D and toward capital expenditures. For firms with higher levels of equity incentives, we predict and find that clawback adoptions increase capital expenditures without significant R&D reductions consistent with longer-term share-value incentives. We further find capital investment mix shifts toward acquisitions for firms with enabling liquidity and that clawback adoptions are associated with capital over-investment. This evidence extends prior findings regarding the effects of clawback adoptions and is timely given a pending SEC rule that would mandate clawback provisions for all firms listing on US exchanges and that explicitly requests comments on its potential effects.
Contact : Lee, Jisun ( jisunlee@kaist.ac.kr )