Effects of CEO characteristics on the relationship between excess cash holdings and audit effort

2021 ◽  
pp. 1-25
Author(s):  
Sang Cheol Lee ◽  
Jaemin Lim
Keyword(s):  
Cash Holdings ◽  
Excess Cash ◽  
The Relationship ◽  
Ceo Characteristics

CEO inside debt and the value of excess cash

2018 ◽  
Vol 19 (2) ◽  
pp. 225-244 ◽  
Author(s):  
Mohamed Belkhir ◽  
Sabri Boubaker ◽  
Kaouther Chebbi
Keyword(s):  
Firm Value ◽  
Cash Holdings ◽  
Future Research ◽  
Content Type ◽  
Marginal Value ◽  
Inside Debt ◽  
Excess Cash ◽  
Fama And French ◽  
The Relationship ◽  
Practical Implications

PurposeThe purpose of this paper is to investigate the relationship between corporate debt-like compensation and the value of excess cash holdings.Design/methodology/approachThe sample comprises 876 US firms covered by ExecuComp over the period 2006-2013. The authors apply the valuation regression of Fama and French (1998) to examine the marginal value of excess cash as a function of CEO inside debt holdings.FindingsThis paper proposes one hypothesis. The results constitute evidence that the value of excess cash to shareholders declines as CEO inside debt increases. More interestingly, excess cash holdings contribute less to firm value when shareholders expect their value to be destroyed due to managers’ conservative behavior.Research limitations/implicationsThe sample comprises only US firms, owing to a lack of firms data from other countries. It would be interesting to conduct future research on an international sample.Practical implicationsThis paper contributes to a deeper understanding of investor valuation of excess cash in the presence of CEO inside debt. The findings complement previous studies on US firms by confirming the existence of a relationship between the agency costs of debt and firm policy decisions.Originality/valueThis work is, to the best of the authors’ knowledge, the first to examine the relationship between debt-like compensation and excess cash valuation, and it supports the view that the conflict between shareholders and debtholders largely affects firm cash policy, and hence, cash valuation.

CEO Characteristics and Value of Cash Holdings

2017 ◽  
Author(s):  
Seongjae Mun ◽  
Dongwook Seo ◽  
Seung Hun Han
Keyword(s):  
Cash Holdings ◽  
Value Of Cash ◽  
Ceo Characteristics

scholarly journals Family Control And The Value Of Cash Holdings

2015 ◽  
Vol 31 (2) ◽  
pp. 647 ◽  
Author(s):  
Sabri Boubaker ◽  
Imen Derouiche ◽  
Majdi Hassen
Keyword(s):  
Firm Value ◽  
Family Firms ◽  
Cash Holdings ◽  
Firm Resources ◽  
Family Control ◽  
Large Sample ◽  
Listed Firms ◽  
Excess Cash ◽  
Cash Reserves ◽  
Corporate Cash Holdings

The present study investigates the effects of family control on the value of corporate cash holdings. Using a large sample of French listed firms, the results show that the value of excess cash reserves is lower in family firms than in other firms, reflecting investors concern about the potential misuse of cash by controlling families. We also find that the value of excess cash is lower when controlling families are involved in management and when they maintain a grip on control, indicating that investors do not expect the efficient use of cash in these firms. Our findings are consistent with the argument that the extent to which excess cash contributes to firm value is lower when dominant shareholders are likely to expropriate firm resources. Overall, family control seems to be a key determinant of cash valuation when ownership is concentrated.

The effect of managerial horizon on cash holdings

2019 ◽  
Vol 45 (8) ◽  
pp. 1092-1110
Author(s):  
Sanjib Guha ◽  
Niazur Rahim
Keyword(s):  
Design Methodology ◽  
Cash Holdings ◽  
Previous Literature ◽  
Cash Holding ◽  
Firm Characteristics ◽  
Current Compensation ◽  
Content Type ◽  
Ceo Age ◽  
Excess Cash ◽  
Managerial Horizon

Purpose US corporations are now sitting on an enormous stockpile of cash. Instead of investing their resources and creating jobs, the firms are holding on to excess cash. Academicians and practitioners alike have tried to fathom the reasons why companies are holding on to so much cash. Numerous studies have talked about the various motives for holding cash. Many researchers have tried to correlate excess cash holding with particular firm characteristics. The purpose of this paper is to study the correlations that exist between excess cash holding and some measurable managerial characteristics. Design/methodology/approach Four different measures of managerial horizon (MH) were constructed. The first two constructs (MH1 and MH2) are based on the CEO’s age and how long he has been the CEO of the company. The next two constructs (MH3 and MH4) are based on compensation, proportion of current compensation and proportion of future compensation. This paper tries to examine if MH has any impact on excess cash holding. Findings The results clearly show that the CEO age and the proportion of CEO’s compensation (current and future) do determine level of cash holding in the company. Younger CEOs hold more cash compared to older CEOs. Older CEOs hold less cash suggesting that as CEOs grow older they might be motivated by the idea of leaving a long lasting legacy. CEOs who receive more of their compensation in future payments also hold on to more cash, whereas CEOs who receive more of their compensation in current payments hold less cash. Originality/value There is no previous literature dealing with MH and cash holding by corporations.

The Impact of Corporate Governance Mechanisms on the Relationship Between Cash Holdings and Audit Fees in Egyptian Listed Companies

2019 ◽  
Vol 9 (2) ◽  
pp. 314
Author(s):  
Eman Abdel-Wanis
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Panel Data Analysis ◽  
Cash Holdings ◽  
Audit Fees ◽  
Governance Mechanisms ◽  
Listed Firms ◽  
Corporate Governance Mechanisms ◽  
The Impact ◽  
The Relationship

This paper explores the impact of corporate governance mechanisms on the nature of the relationship between cash holdings and audit fees, which helps provide an opportunity to identify whether these mechanisms enable to mitigate agency problems, and thus lower audit fees through a sample of 78 Egyptian listed firms in EGX 100 during the period 2014-2016 using panel data analysis. Results indicated that cash holding increases auditing fees. The board characteristics affect negatively on the relationship between cash holdings and audit fees. Also, ownership structure affects negatively on the relationship between cash holdings and audit fees. As well audit committee affects negatively on the relationship between cash holdings and audit fees. There results support the view that corporate governance mitigate on the relationship between cash holdings and audit fees.

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