Do Management Changes Matter? An Empirical Investigation of REIT Performance

Sirmans, G. Stacy; Friday, H. Swint; Price, Russell M.

doi:10.1080/10835547.2006.12091173

Cited by 10 publications

(3 citation statements)

References 14 publications

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“…This implies the lesser board members are independent, the higher the financial performance of manufacturing companies in Nigeria is enhanced. The result is consistent with Schellenger et al (1989), Rosensstein and Wyatt (1990), Pearce II and Zahra (1992), Daily and Dalton (1993), Choand Kim (2007), Agrawal and Knoeber (1996), Yermack (1996), Bhagat and Black (2002), Kiel and Nicholson (2003), Cornett et al (2008), ) Knyazeva et al (2013) and Chen et al (2015 but not in consistent with the work of BhagatandBlack(2002), Odudu et al (2016).…”

supporting

confidence: 79%

“…It is supported by the findings of Schellenger et al (1989), Rosensstein & Wyatt (1990), Pearce II & Zahra (1992), Daily & Dalton (1993), Cho & Kim (2007) who stated similar ideas with Agrawal & Knoeber (1996), Yermack (1996), Bhagat & Black (2002), Kiel & Nicholson (2003), Cornett et al (2008), ) Knyazeva et al (2013) and Chen et al (2015 who stated that the proportion of independent commissioners positively influences the company's performance. On the other hands, there was a finding stating that the proportion of independent commissioners does not influence the company's performance.…”

Section: Board Diversity and Financial Performancementioning

confidence: 68%

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Board Structure and Financial Performance of Manufacturing Companies in Nigeria

Igbinosa,

Akinuli,

Popoola

et al. 2024

BJMAS

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This study examines the impact of board structure on corporate financial performance in Nigeria. It investigates the Diversity of boards of directors in Nigerian firms and analyses whether board structure has an impact on financial performance, as measured by return on equity (ROE) and return on capital employed (ROCE). Based on the extensive literature, four board characteristics (board Diversity, board size, board ownership and CEO duality) have been identified as possibly having an impact on corporate financial performance and these characteristics are set as the independent variables. The Ordinary Least Squares (OLS) regression was used to estimate the relationship between corporate performance measures and the independent variables. Findings from the study show that there is strong positive association between board size and corporate financial performance. Evidence also exists that there is a positive association between outside directors sitting on the board and corporate financial performance. However, a negative association was observed between directors’ stockholding and firm financial performance measures. In addition, the study reveals a negative association between ROE and CEO duality, while a strong positive association was observed between ROCE and CEO duality. The study suggests that large board size should be encouraged and the Diversity of outside directors as members of the board should be sustained and improved upon to enhance corporate financial performance.

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supporting

confidence: 79%

Section: Board Diversity and Financial Performancementioning

confidence: 68%

Board Structure and Financial Performance of Manufacturing Companies in Nigeria

Igbinosa,

Akinuli,

Popoola

et al. 2024

BJMAS

View full text Add to dashboard Cite

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“…Our study is also related to the REIT literature on the influence of the CEO on REIT behavior. Sirmans et al (2006) find a significant relation between the performance of REITs and a management change. Ooi (2009) finds that the compensation structure of CEOs has a significant impact on REIT performance.…”

Section: Introductionmentioning

confidence: 78%

Managerial decision horizon and real estate investment trusts (REITs)

Yung

Jian

2017

RBF

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Purpose The purpose of this paper is to examine the effects of managerial decision horizon (MDH) on real estate investment trust (REIT) behavior and performance. Design/methodology/approach In this study, the authors expand the number of proxies and measure managerial horizon by CEO age, CEO tenure, cash compensation relative to total compensation, and the amount of vested equity-based compensation to total compensation. To avoid potential measurement error, the authors compute the average ranking score of the four individual measures to determine the overall MDH of a CEO. Cross-sectional time series regressions are then performed on the effects of CEO MDH on REIT policies and performance. The authors also examine if the effect of myopic MDH can be mitigated by good corporate governance. For robustness purpose, the authors also compare the effects of age-related MDH and compensation-related MDH. Findings The results show that REITs managed by CEOs with short MDHs have lower levels of asset growth and a lower standard deviation of return on assets. These REITs also have lower debt levels, lower dividend payouts, and hold more cash. The results suggest that short-horizon CEOs have incentives to lower investment risk, default risk, and liquidity risk at the firm level in order to protect personal benefits. CEOs with a short horizon also have a negative impact on REIT performance. The results also show that CEO compensation-related horizon problems are mitigated by corporate governance, but CEO age-related horizon problems are significant and persistent. The results suggest that age-related behavioral biases of the CEO are important determinants of corporate decisions. Practical implications The results of this study suggest that the managerial behavioral biases should be considered in understanding firm behavior. Originality/value This is the first study that examines the effects of MDH on REIT behavior and performance. The unique regulatory environment of REITs makes them less susceptible to agency problems of free cash flow and thus provides a clearer picture of the effect of MDH. Prior studies focus on the effect of managerial horizon on firm investment activity, this study expands the scope to examine the effects on investment and financial policies. In addition, this study adds to the literature by showing that the effect of age-related horizon problems may not be mitigated by good corporate governance.

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