Job Market Paper
Strategic Use of Executives’ Social Media and Personal Equity Incentives
Committee: Dain Donelson (Co-Chair), Paul Hribar (Co-Chair), Cristi Gleason, Erik Lie, and Adrienne Rhodes
Presentation: The University of Iowa, 2023; FARS 2024 Midyear Meeting (scheduled)
This study explores executives' strategic amplification of financial news on social media related to personal equity incentives. Analyzing tweets from 242 executives across 230 firms between 2009 and 2021, I examine executives' amplification behavior on earnings announcements. I find that executives amplify financial information on earnings announcements followed by insider sale transactions. This incremental amplification is observed solely when the underlying earnings news is positive. Moreover, strategic amplification is associated with insider sale transactions executed under Rule 10b5-1 plans, which permit trading during "black-out" periods. Strategic amplifications occur among executives in firms with low visibility and executives with a prominent presence on Twitter. Furthermore, I show that these executives can benefit from their amplification tactics; their tweets increase cumulative abnormal returns when earnings announcements convey small positive news. Finally, I provide preliminary evidence suggesting that executives amplify non-GAAP measures more prominently and that strategic amplification is associated with aggressive non-GAAP reporting.
Labor Competition and Management Forecast Bias
Co-authors: Lars Hass (University of Strathclyde), Paul Hribar (The University of Iowa), Clare Wang (University of Colorado Boulder)
Presentation: The University of Iowa, 2020
Draft available upon request
This study examines whether firms faced with heightened labor competition bias their management forecasts optimistically to project a positive signal to the labor market and attract employees. We define labor competition as the competition between firms to hire employees in the same occupations. Using an occupation-based measure of labor competition for a broad sample of U.S. firms that issue management forecasts, we find evidence of a positive association between labor competition and management forecast optimism. This relationship is more pronounced in firms where employees play a critical role in value creation and possess advanced accounting knowledge, enabling them to interpret the signal. Moreover, the optimistic bias related to labor competition is more evident when it becomes challenging for information users to detect such bias. Overall, our findings show that labor competition can be a significant motivator for firms to introduce an optimistic bias in management forecasts.
First-Movers in Reducing Executive Litigation Risk: Evidence from Delaware Amendments to Executive Exculpation
Co-authors: Dain Donelson (The University of Iowa) and Christopher Yust (Texas A&M University)
Working on the First Draft
Real Effects of Strategic Disclosure: Evidence from Labor Union Negotiations
Co-authors: Dain Donelson (The University of Iowa) and Paul Hribar (The University of Iowa)
Data Analysis Stage