Determinants of Disclosure Noncompliance and the Effect of the SEC Review: Evidence from the 2006 Mandated Compensation Disclosure Regulations

Robinson, John R.; Xue, Yanfeng; Yu, Yong

doi:10.2308/accr-10033

Cited by 163 publications

(120 citation statements)

References 25 publications

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“…Such evidence is consistent with previous research. For example, Robinson et al (2011) report that non-disclosure for US firms is related to excessive compensation. Importantly, our findings weaken the arguments related to personal security costs and justify the reactions of the investor advisors that recommended a dissenting vote in shareholders meetings of non-complying firms (Carvalho and Torres, 2011).…”

Section: Resultsmentioning

confidence: 99%

“…Our article stems from the corporate governance and disclosure compliance literature that suggests that there is ample room for firm choice given that corporate governance practices that may impact value and the enforcement of such rules tend to vary both at the firm as well as the country levels (Black, Carvalho, and Gorga, 2012;Robinson, Xue, and Yu, 2011;Silveira, Leal, Carvalhal-da-Silva, and Barros, 2010;Aggarwal, Erel, Stulz, and Williamson, 2009;Dahya, Dimitrov, and McConnell, 2008;Berglöf and Pajuste, 2005). Robinson et al (2011) investigate disclosure defects, defined as partial non-compliance with new US Securities and Exchange Commission (SEC) compensation disclosure regulations from 2006.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Robinson et al (2011) investigate disclosure defects, defined as partial non-compliance with new US Securities and Exchange Commission (SEC) compensation disclosure regulations from 2006. They affirm that no company in a random sample of 336 firms selected by the SEC disclosed without defects, which vary across firms in gravity and kind.…”

Section: Literature Reviewmentioning

confidence: 99%

See 2 more Smart Citations

Facing the Regulators: Noncompliance With Detailed Mandatory Compensation Disclosure in Brazil

Barros

Silveira

Bortolon

et al. 2015

Emerging Markets Finance and Trade

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This paper examines the overt non-compliance with a regulation mandating detailed compensation disclosure in Brazil. A preliminary court injunction was used by a substantial number of firms to omit the most sensitive part of the compensation information and the main argument was that such disclosure posed a security threat to managers and directors.However, our empirical analysis suggests that the decision to avoid full compliance with the disclosure regulation is more plausibly motivated by agency conflicts. Specifically, we find that non-complying companies tend to have lower corporate governance quality and higher ownership concentration. They also tend to be larger and less profitable. Finally, state and foreign entity owned companies are significantly less likely to rank among non-compliers.Our event study shows that price revisions around the day when this decision became public were significantly worse for firms that are perceived as having higher governance quality, suggesting that these firms negatively surprised their outside shareholders by failing to comply with a regulation aligned with good corporate governance practices.

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Section: Resultsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Facing the Regulators: Noncompliance With Detailed Mandatory Compensation Disclosure in Brazil

Barros

Silveira

Bortolon

et al. 2015

Emerging Markets Finance and Trade

View full text Add to dashboard Cite

show abstract

“…Prior research on readability of 10-K, MD&A and CD&A suggests that the readability is strategically used by management to obfuscate poor earnings or excess CEO compensation (Li, 2008;Robinson, Xue and Yu, 2011;Laksmana, Tietz and Yang, 2012). Laksmana, Tietz and Yang (2012), in particular, find that in the year 2006 (proxy year 2007) companies with excess CEO compensation report less readable CD&A.…”

Section: Introductionmentioning

confidence: 99%

Readability of compensation discussion and analysis: the impact of the Plain English initiative

Xuan

Krishnan

Ping

2016

IJSS

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Abstract:After the initial requirement of compensation discussion and analysis (CD&A) in proxy documents, SEC reviewed 350 companies' CD&A in 2007 and reported lack of readability and clarity in this document. Hence we examined the readability measures of CD&A from 2007 to 2013. We also compared the CD&A to the 'letter to the shareholders' and the management discussion and analysis (MD&A) of annual report in 2012 for the differences in readability. As expected, the CD&A was less readable than the letter to shareholders, but more readable than MD&A. We also found that although year-to-year change in readability was small, readability of CD&A had improved significantly over the years. In addition, we found that the higher the excess CEO compensation, the more readable the CD&A, providing evidence for the litigation and legitimacy theories.

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“…Such information may be used by competitors, for instance, at the company's expense. Thus, companies assess the costs and benefits of information disclosure, even those related to mandatory disclosure information (Dye, 2001; Robinson, Xue, & Yu, 2011;Verrecchia, 2001). …”

Section: Introductionmentioning

confidence: 99%

Determining Factors of the Level of Disclosure of Information on Business Combinations with the Entry into Force of the Accounting Standard CPC 15

Nakayama

Salotti

2014

Rev. contab. finanç.

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This paper aimed to investigate information disclosure on business combination transactions that took place in Brazil in 2010, when the Accounting Standard CPC 15 entered into force, and evaluate which were the determining factors of the level of disclosure of information related to it. To evaluate the disclosure level, a disclosure index of business combinations (INDCOMB) was prepared, having the disclosure index developed by Shalev (2009) as a basis. We evaluated, in the light of the literature on disclosure and business combinations, whether the following factors influenced on the disclosure level: acquiring company size, recognized percentage of overprice for expected future profitability in relation to the transaction value, dispersion of capital of the acquiring company, audit firm size, and participation of the acquiring company in American Depositary Receipts (ADRs) programs. The control variables used were listing of the acquiring company in the various segments of BM&FBOVESPA, operation sector, origin (state, private company with national capital or private company with foreign capital), and relative acquired company size in relation to the acquiring company. We analyzed business combination transactions that took place in 2010, reported by 40 open capital companies involved in 76 transactions. We conclude that the audit firm size and the relative acquired company size were factors that influenced on the level of disclosure of information regarding business combinations in 2010. The other factors showed no conclusive results.

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Determinants of Disclosure Noncompliance and the Effect of the SEC Review: Evidence from the 2006 Mandated Compensation Disclosure Regulations

Cited by 163 publications

References 25 publications

Facing the Regulators: Noncompliance With Detailed Mandatory Compensation Disclosure in Brazil

Facing the Regulators: Noncompliance With Detailed Mandatory Compensation Disclosure in Brazil

Readability of compensation discussion and analysis: the impact of the Plain English initiative

Determining Factors of the Level of Disclosure of Information on Business Combinations with the Entry into Force of the Accounting Standard CPC 15

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