David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Ezio Di Nucci
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Business Ethics 64 (4):405 - 419 (2006)
This study investigates the impact of fraud/lawsuit revelation on U.S. top executive turnover and compensation. It also examines potential explanatory variables affecting the executive turnover and compensation among U.S. fraud/lawsuit firms. Four important findings are documented. First, there was significantly higher executive turnover among U.S. firms with fraud/lawsuit revelation in the Wall Street Journal than matched firms without such revelation. Second, although on average, U.S. top executives received an increase in cash compensation after fraud/lawsuit revelation, this increase is smaller than that of matched non-fraud/lawsuit firms. Third, fraud/lawsuit firms were more likely to change top executive when chief executive officer (CEO) was not the board chairman and CEO had been on the board for a short time. Fourth, fraud/lawsuit firms were more likely to reduce their executive cash compensation when profitability was low, firms were involved in fraud, the compensation committee size was small, and the board met more often. These findings indicate that although, in general, U.S. fraud/lawsuits firms did not reduce their executive cash compensation, those involved in fraud were more likely to reduce their executive cash compensation than to change their top executives. The finding, that ethical standards is not a significant factor for U.S. executive turnover nor compensation reduction, suggests that ethics appears to play no part in the board’s decisions, and that U.S. firms may have ethical standards in writing but they do not implement nor enforce the standards.
|Keywords||board of directors corporate governance ethical standards executive compensation executive turnover fraud lawsuit|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
No references found.
Citations of this work BETA
Martin J. Conyon & Lerong He (forthcoming). Executive Compensation and Corporate Fraud in China. Journal of Business Ethics.
Bahram Soltani (2014). The Anatomy of Corporate Fraud: A Comparative Analysis of High Profile American and European Corporate Scandals. Journal of Business Ethics 120 (2):251-274.
Chunxin Jia, Shujun Ding, Yuanshun Li & Zhenyu Wu (2009). Fraud, Enforcement Action, and the Role of Corporate Governance: Evidence From China. [REVIEW] Journal of Business Ethics 90 (4):561-576.
Shujun Ding, Chunxin Jia, Yuanshun Li & Zhenyu Wu (2010). Reactivity and Passivity After Enforcement Actions: Better Late Than Never. [REVIEW] Journal of Business Ethics 95 (2):337 - 359.
James S. Ang, Zhiqian Jiang & Chaopeng Wu (forthcoming). Good Apples, Bad Apples: Sorting Among Chinese Companies Traded in the U.S. Journal of Business Ethics.
Similar books and articles
Kiridaran Kanagaretnam, Gerald J. Lobo & Emad Mohammad (2009). Are Stock Options Grants to Ceos of Stagnant Firms Fair and Justified? Journal of Business Ethics 90 (1):137 - 155.
Lois Schafer Mahoney & Linda Thorn (2006). An Examination of the Structure of Executive Compensation and Corporate Social Responsibility: A Canadian Investigation. [REVIEW] Journal of Business Ethics 69 (2):149 - 162.
Waymond Rodgers & Susana Gago (2003). A Model Capturing Ethics and Executive Compensation. Journal of Business Ethics 48 (2):189-202.
John Dobson (2011). A Moral and Economic Defense of Executive Compensation. Business and Professional Ethics Journal 30 (1-2):59-70.
Ye Cai, Hoje Jo & Carrie Pan (2011). Vice or Virtue? The Impact of Corporate Social Responsibility on Executive Compensation. Journal of Business Ethics 104 (2):159-173.
Bruce Walters, Tim Hardin & James Schick (1995). Top Executive Compensation: Equity or Excess? Implications for Regaining American Competitiveness. [REVIEW] Journal of Business Ethics 14 (3):227 - 234.
Ella Mae Matsumura & Jae Yong Shin (2005). Corporate Governance Reform and CEO Compensation: Intended and Unintended Consequences. [REVIEW] Journal of Business Ethics 62 (2):101 - 113.
James A. Brander (2006). The Effect of Ethical Fund Portfolio Inclusion on Executive Compensation. Journal of Business Ethics 69 (4):317 - 329.
Allan S. Ashley & Simon S. M. Yang (2004). Executive Compensation and Earnings Persistence. Journal of Business Ethics 50 (4):369-382.
Jeffrey Moriarty (2009). How Much Compensation Can CEOs Permissibly Accept? Business Ethics Quarterly 19 (2):235-250.
Added to index2009-01-28
Total downloads23 ( #157,754 of 1,790,069 )
Recent downloads (6 months)3 ( #265,711 of 1,790,069 )
How can I increase my downloads?