Matching Items (7)
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- Creators: Hwang, Yuhchang
Description
In this paper, I investigate whether participation in employee stock option exchange programs contains private information about future stock returns. High participation in employee stock option exchange programs is associated with negative future abnormal returns over the ensuing 12-month period. This association is moderated by the transparency of the firm's information environment: high institutional ownership and high financial statement informativeness weaken the negative relation between participation and abnormal returns. Controlling for transparency of the firms' information environment, the association between participation and future returns arises primarily from firms that allow the CEO to participate.
ContributorsMakridis, Vanessa Radick (Author) / Matejka, Michal (Thesis advisor) / Hwang, Yuhchang (Committee member) / Kaplan, Steven E (Committee member) / Arizona State University (Publisher)
Created2013
Description
In this study, I examine the extent to which firms rely on relative performance evaluation (RPE) when setting executive compensation. In particular, I examine whether firms use information about peer performance to determine compensation at the end of the year, i.e. after both firm and peer performance are observed. I find that RPE is most pronounced for firms that allow little or no scope for ex post subjective adjustments to annual bonuses. Conversely, firms that rely mainly on subjectivity in determining bonus exhibit little use of RPE. These findings suggest that information about peer performance is not used at the end of the year. Instead, peer performance seems to be incorporated in performance targets at the beginning of the year, at least among firms primarily using objective performance measurements. In addition, I provide new evidence on the determinants of the use of subjectivity.
ContributorsTsui, Stephanie (Author) / Matejka, Michal (Thesis advisor) / Hwang, Yuhchang (Committee member) / Kaplan, Steven (Committee member) / Arizona State University (Publisher)
Created2013
Description
This study provides new evidence on the choice of performance measures used in dual-class firms to incentivize CEOs. The choice of performance measures is informative about the extent to which the board of directors focuses CEO efforts on firms' long-term versus short-term objectives. To empirically operationalize performance evaluation horizon, I measure the length of the performance evaluation period in CEO stock awards, the use of stock-based measures, and the use of peer-based measures. I collect data on 419 dual-class firms and match them with a control group of single-class firms. I find that market-based metrics are less likely to be used by dual-class firms relative to single-class firms. In addition, I find that peer-based measures are much less common for dual-class than single-class firms. These findings suggest that dual-class firms shield their executives from short-term market pressures and design stock compensation contracts that deemphasize volatile stock prices.
ContributorsLi, Ji (Author) / Matejka, Michal (Thesis advisor) / Hwang, Yuhchang (Committee member) / Reckers, Philip (Committee member) / Arizona State University (Publisher)
Created2014
Description
Responding to the allegedly biased research reports issued by large investment banks, the Global Research Analyst Settlement and related regulations went to great lengths to weaken the conflicts of interest faced by investment bank analysts. In this paper, I investigate the effects of these changes on small and large investor confidence and on trading profitability. Specifically, I examine abnormal trading volumes generated by small and large investors in response to security analyst recommendations and the resulting abnormal market returns generated. I find an overall increase in investor confidence in the post-regulation period relative to the pre-regulation period consistent with a reduction in existing conflicts of interest. The change in confidence observed is particularly striking for small traders. I also find that small trader profitability has increased in the post-regulation period relative to the pre-regulation period whereas that for large traders has decreased. These results are consistent with the Securities and Exchange Commission's primary mission to protect small investors and maintain the integrity of the securities markets.
ContributorsDong, Xiaobo (Author) / Mikhail, Michael (Thesis advisor) / Hwang, Yuhchang (Committee member) / Hugon, Artur J (Committee member) / Arizona State University (Publisher)
Created2011
Description
This research project examines the craft brewing industry and its position in the North American market. Specifically, this research will highlight the most important aspects of the product market, cost structure, market trends, as well as an assessment of the viability of several modes of entry. The data and analysis provided indicates that the industry is promising and poised to grow in comparison to many other sectors within the alcoholic beverages industry, as demand for differentiated craft beer products is relatively strong. The continued existence of craft brewing would not be made possible without the devotion and dedication of individuals simply interested in brewing recipes at home. Although the process of brewing remains relatively traditional, the paper will discuss the possibilities to diversify as a successful craft brewing brand due to consumers' willingness and curiosity to try new beverages. Production details and supply chain processes will be discussed to fully understand the fruitful beginnings of a local brewer to a large scale company that distributes nationwide. Nonetheless, prominent risks include extensive regulatory hurdles ranging from local to federal levels and threats from significant established competitors. These competitors and their business activities will be heavily discussed as it pertains to the question of whether entering the market is a smart business decision. The purpose of this research is to provide potential business owners and investors the strength and knowledge to engage in the craft brewing industry. In essence, the business decision to participate in the craft brewing industry is met with encouragement from an avid consumer base, collaboration with competitors, and an undying passion to brew quality beer for consumption.
ContributorsKnapp, Kurt (Co-author) / Wu, Katherine (Co-author) / Nguyen, Kelley (Co-author) / Budolfson, Arthur (Thesis director) / Bhattacharya, Anand (Committee member) / Department of Finance (Contributor) / Department of Economics (Contributor) / Department of Supply Chain Management (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / School of Accountancy (Contributor) / Hugh Downs School of Human Communication (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
Description
The Balanced Scorecard (BSC) is a strategic planning and management system that causally links actions and subsequent financial and nonfinancial outcomes. The primary goal of the BSC is to motivate actions that are congruent with the organization's long-term strategy. A secondary purpose of the BSC is to facilitate the performance evaluation of managers charged with advancing the corporate strategy. To serve this second purpose the BSC must include a time dimension. Specifically, the strategic plan must recognize time lags between actions taken, lead outcomes (often nonfinancial in nature) and lagged outcomes (usually financial success measures). If an evaluator is not provided with timeline information a subordinate may be evaluated based on inappropriate performance metrics; that is, a subordinate may be held accountable for an outcome beyond the subordinate's time span of control. This study evaluates the effect on performance evaluations and bonus allocations when evaluators are provided (or not provided) with a strategy implementation timeline. This issue has not been previously examined in the literature. This study also examines the moderating effect of experience, management buy-in to the corporate strategy, and affect on performance evaluations and bonus allocations. Results from an experiment conducted with evening MBA students show that inclusion of a strategy implementation timeline leads to more normatively correct performance evaluations, but only for experienced participants. Higher levels of both positive and negative affect were found to result in choice avoidance behavior. Buy-in to the corporate strategy was not found to have an effect.
ContributorsBartlett, Geoffrey (Author) / Reckers, Philip M.J. (Thesis advisor) / Lowe, D. Jordan (Committee member) / Hwang, Yuhchang (Committee member) / Arizona State University (Publisher)
Created2012
Description
In 2022, the revenue generated from accounting services hit an all-time high of 119.48 billion USD (“Accounting Services in the US - Market Size”, 2022). On top of this, research has shown that 45% of all accounting professionals would like to automate something about their workflow (Thomas, 2020). Indeed, a lot of bookkeeping accountancy has been phased out by simple automation. However, larger accounting tasks like business mergers still require a team of accountants despite being a largely iterative process. This project chronicles one such attempt at automating accounting events or transactions that are performed by businesses both large and small. With the help of accounting students Madeline Stolper and Heddie Liu we were able to build a fully-functioning website to automate accounting transactions. For this project, we used industry-standard software frameworks React and Express to build the site with dynamic accounting applications. These applications were built with reusable components, making the development of future applications very simple. We also leveraged cutting-edge technological solutions from Amazon Web Services to make the website available on the Internet with rapid response times. Lastly, we incorporated an agile approach to project management and communication, in order to create functionality in the most efficient and organized manner possible. On a large scale, something like this has never been attempted and TurboIFRS/GAAP represents a revolutionary leap in accounting automation.
ContributorsForde, Jakob (Author) / Roth, Ryder (Co-author) / McLemore, Benjamin (Co-author) / Chen, Yinong (Thesis director) / Hunt, Neil (Committee member) / Barrett, The Honors College (Contributor) / Computer Science and Engineering Program (Contributor) / School of Music, Dance and Theatre (Contributor) / School of Mathematical and Statistical Sciences (Contributor)
Created2022-05