[Research Seminar 2018.06.29]Do Clawback Adoptions Influence Capital Investment Mix?

2018년도 6월 5차 연구세미나 공지 (Notice of Research Seminar 5, June)
06/25/2018
2018년도 7월 1차 연구세미나 공지 (Notice of Research Seminar 1, July)
07/11/2018

[Research Seminar 2018.06.29]Do Clawback Adoptions Influence Capital Investment Mix?

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Jeong Hwan Joo
The University of Hong Kong

 

Abstract:

We present evidence that clawback provision adoptions influence capital investment mix and efficiency consistent with managerial compensation incentives. Specifically, using a propensity-matched sample of 346 voluntary clawback adoptions, we find that for firms with higher proportions of performance-linked annual pay, capital investments shift away from R&D and toward capital expenditures. For firms with higher levels of equity incentives, clawback adoptions increase capital expenditures without significant R&D reductions consistent with longer-term share-value incentives. Further evidence indicates that clawback adoptions motivate capital over-investment and reduce capital investment efficiency. This evidence is timely given a pending SEC rule that would mandate clawback provisions for all firms listing on US exchanges.

Language: English