Reaching for The Top, Second edition

An overview of FLorida International University 's plans, strategies, goals, and traditions emphasizing University growth and performance.

Consequences of financial restatements for auditors and top executives

This dissertation consists of three essays and investigates issues related to the impact of financial restatements on auditor change, shareholder actions, and executive turnover in the post-Sarbanes Oxley Act (SOX) period. For the first essay, we examined auditor change at 569 restatement firms and 5,605 control firms for 2004. We found that restatement announcements significantly increased the likelihood of auditor resignation and dismissal in the post-SOX period. The second essay examines shareholder voting on auditor ratifications in 2006 following restatement announcements by SEC registrants in 2005. The proportion of votes not supporting auditor ratification is low even in the presence of a restatement. However, we find that shareholders are more likely to vote against auditor ratification after a restatement when compared to votes at (a) films without restatements, or (b) restating firms in the preceding period. The third essay examines the consequences of financial restatements on the turnover of chief financial officers (CFO). We find that restatement announcements do significantly increase the likelihood of CFO turnover no matter whether the departure is voluntary or forced in nature. Also, the significant relationship is present even after controlling for the effect of CEO turnover.

The impact of institutional complexity and top management characteristics on executive compensation and firm performance

While most studies take a dyadic view when examining the environmental difference between the home country of a multinational enterprise (MNE) and a particular foreign country, they ignore that an MNE is managing a network of subsidiaries embedded in diverse environments. Additionally, neither the impacts of global environments on top executives nor the effects of top executives’ capabilities to handle institutional complexity are fully explored. Thus, using a three-essay format, this dissertation tried to fill these gaps by addressing the effects of institutional complexity and top management characteristics on top executive compensation and firm performance. ^ Essay 1 investigated the impact of an MNE’s institutional complexity, or the diversity of national institutions facing an MNE’s network of subsidiaries, on the top management team (TMT) compensation. This essay proposed that greater political and cultural complexity leads to not only greater TMT total compensation but also to a greater portion of TMT compensation linked with long-term performance. The arguments are supported in this essay by using an unbalanced panel dataset including 296 U.S. firms with 1,340 observations. ^ Essay 2 explored TMT social capital and its moderating role on value creation and appropriation by the chief executive officer (CEO). Using a sample with 548 U.S. firms and 2,010 observations, it found that greater TMT social capital does facilitate the effects of CEO intellectual capital and social capital on firm growth. Finally, essay 3 examined the performance implications for the fit between managerial information-processing capabilities and institutional complexity. It proposed that institutional complexity is associated with the needs of information-processing. On the other hand, smaller TMT turnover and larger TMT size reflect larger managerial information-processing capabilities. Consequently, superior performance is achieved by the match among institutional complexity, TMT turnover, and TMT size. All hypotheses in essay 3 are supported in a sample of 301 U.S. firms and 1,404 observations. ^ To conclude, this dissertation advances and extends our knowledge on the roles of institutional environments and top executives on firm performance and top executive compensation.^