Dynamics of CEO Disclosure Style

Abstract

We examine changes in CEOs' disclosure styles in quarterly earnings conference calls over their tenure. Our longitudinal analysis of newly hired CEOs shows that CEOs' forward-looking disclosures and their disclosures' relative optimism decline in their tenure. Further, externally hired and inexperienced CEOs are more future-oriented, and younger CEOs exhibit greater optimism in their disclosures. We also find that non-CEO executives' disclosure styles remain time-invariant over their CEOs' tenure. Our evidence is consistent with uncertainty reduction about managers' ability over their tenure (1) reducing the demand for and the supply of forward-looking disclosures, and (2) attenuating managerial career concerns leading to the decline in disclosure optimism. JEL Classifications: D22; D70; D82; D83; L20; M12.

Big Shoes to Fill: CEO Turnover and Pre-Appointment Firm Performance.

“…We further classify each CEO turnover into performance-induced and non-performanceinduced following Pan et al (2015). Other studies have also followed this classification methodology (e.g., Bochkay et al 2019). CEOs are rarely publicly fired from their positions, and firms usually offer bland, noninformative reasons when announcing CEO departures (e.g., he…”

“…Therefore, the "contrast effects" hypothesis predicts that the effect of pre-appointment firm performance on CEO turnover-performance sensitivity should be stronger among firms with greater uncertainty about their incumbent CEOs' ability. Following prior literature (Pan et al 2015, Bochkay et al 2019, we use three measures to proxy for CEO ability uncertainty: CEO Age, Outsider CEO, and Prior Experience. Younger CEOs have shorter track records and less visibility than older CEOs, and thus their ability is more uncertain relative to their older counterparts.…”

Big Shoes to Fill: CEO Turnover and Pre-Appointment Firm Performance

“…We further classify each CEO turnover into performance-induced and non-performanceinduced following the methodology as in Pan et al (2015). Other studies have also followed this classification methodology (e.g., Bochkay et al 2019). CEOs are rarely publicly fired from their positions, and firms usually offer bland, noninformative reasons when announcing CEO departures (e.g., he wants to "spend more time with his family").…”

“…Therefore, the "contrast effects" hypothesis predicts that the effect of pre-appointment firm performance on CEO turnover-performance sensitivity should be stronger among firms with greater uncertainty about their incumbent CEO's ability. Following the prior literature (Pan et al 2015, Bochkay et al 2019, we use three measures to proxy for uncertainty about CEO ability:…”

Uma revisão sistemática sobre teleconferências de resultados como meio de divulgação voluntária no mercado de capitais

“…Neste contexto, vários estudos trabalharam com essa segmentação das teleconferências de resultados (BOCHKAY et al, 2019;BROCHET et al, 2018;MATSUMOTO et al, 2011). Em contrapartida, outros estudos empíricos somente analisaram o momento de interação entre os participantes (GREEN et al, 2019;JUNG et al, 2018;HOPE;WANG, 2018;ABRAHAM;BAMBER, 2017;LEE, 2016;DAVIS et al, 2015;ALLEE;DEANGELIS, 2015;.…”