DETERMINANTS OF OUTSIDE DIRECTOR TURNOVER

In this paper we provide evidence that independent director turnover is influenced by a series of economic factors. Directors, both independent and insider, are less likely to leave if they are paid well or if the firm has a director pension plan. They are also more likely to leave when the firm is performing poorly or when they expect it to perform poorly. They are more likely to leave when the firm is riskier, but are less likely to leave when they chair certain committees such as the audit and compensation committee, which may bring them more prestige, or perhaps an additional stipend. Differentially, the association between turnover and firm performance is weaker for inside directors. This is consistent with inside directors’ response to reputation concerns being lower than that of independent directors due to the bonding and compensation effects.Director turnover, economic factors

AUDIT FIRM REPUTATION, AUDITOR SWITCHES, AND CLIENT STOCK PRICE REACTIONS: THE ANDERSEN EXPERIENCE

The financial scandal surrounding the collapse of Enron caused erosion in the reputation of its auditor, Andersen, leading to concerns about Andersen’s ability to continue in existence and ultimately its demise. In this paper we investigate the timing of switch by former Andersen’s clients. We find that the timing of the switch is related to variables hypothesized to be associated with the cost of switch. Specifically these are client size, auditor industry specialization, provision of non-audit services, auditor tenure, quality of earnings and financial distress In addition we find that clients with the greatest market losses attributable to disclosures pertaining to Andersen’s audit of Enron, and strongest corporate governance were more likely to switch early, while those with the strongest ties to Andersen were more likely to delay switching. We also find that clients switching from Andersen experienced positive abnormal returns during the three-day window surrounding the announcement. Importantly we find this positive return to be greater for clients with greater prior losses.Auditor Reputation, Auditor Change, Arthur Andersen, Enron

Impact of Job Complexity and Performance on CFO Compensation

This study investigates the impact of job complexity and firm as well as CFO-specific performance on CFO compensation. We examine job complexity in terms of the intricacies of a firm’s operations and whether the CFO serves on the Board of Directors. Accounting and stock market rates of return measure overall firm performance while the magnitude and success of the CFO’s interactions with financial analysts along with CFO’s use of accounting discretion to achieve earnings targets proxy for CFO-specific performance. We find that, consistent with our predictions, job complexity and performance (firm and CFO-specific) affect CFO compensation.Chief operating office, Executive compensation

Impact Of Information Technology On The Accuracy Of Analyst Forecasts

We investigate the effect of information technology on analyst’s forecast accuracy. Our analysis suggests that analyst forecast accuracy has increased with the growth in information technology. We capture the growth in information technology with seven proxy variables; the total sales of information technology related firms, number of computers sold, number of websites, number of hosts, number of registered domains, number of bytes, and packets of information transferred.   The results are consistent with our hypothesis that the increase in information technology has decreased the errors in analyst forecasts.  Thus, our paper provides evidence of a positive impact of information technology on the overall information environment.  These findings are important for investors who use analyst forecasts to value the firm and make investments decisions, and for overall efficiency of capital markets.

Safety of pulsed field ablation in more than 17,000 patients with atrial fibrillation in the MANIFEST-17K study

Pulsed field ablation (PFA) is an emerging technology for the treatment of atrial fibrillation (AF), for which pre-clinical and early-stage clinical data are suggestive of some degree of preferentiality to myocardial tissue ablation without damage to adjacent structures. Here in the MANIFEST-17K study we assessed the safety of PFA by studying the post-approval use of this treatment modality. Of the 116 centers performing post-approval PFA with a pentaspline catheter, data were received from 106 centers (91.4% participation) regarding 17,642 patients undergoing PFA (mean age 64, 34.7% female, 57.8% paroxysmal AF and 35.2% persistent AF). No esophageal complications, pulmonary vein stenosis or persistent phrenic palsy was reported (transient palsy was reported in 0.06% of patients; 11 of 17,642). Major complications, reported for ~1% of patients (173 of 17,642), were pericardial tamponade (0.36%; 63 of 17,642) and vascular events (0.30%; 53 of 17,642). Stroke was rare (0.12%; 22 of 17,642) and death was even rarer (0.03%; 5 of 17,642). Unexpected complications of PFA were coronary arterial spasm in 0.14% of patients (25 of 17,642) and hemolysis-related acute renal failure necessitating hemodialysis in 0.03% of patients (5 of 17,642). Taken together, these data indicate that PFA demonstrates a favorable safety profile by avoiding much of the collateral damage seen with conventional thermal ablation. PFA has the potential to be transformative for the management of patients with AF.Peer reviewe

Omecamtiv mecarbil in chronic heart failure with reduced ejection fraction, GALACTIC‐HF: baseline characteristics and comparison with contemporary clinical trials

Aims: The safety and efficacy of the novel selective cardiac myosin activator, omecamtiv mecarbil, in patients with heart failure with reduced ejection fraction (HFrEF) is tested in the Global Approach to Lowering Adverse Cardiac outcomes Through Improving Contractility in Heart Failure (GALACTIC‐HF) trial. Here we describe the baseline characteristics of participants in GALACTIC‐HF and how these compare with other contemporary trials. Methods and Results: Adults with established HFrEF, New York Heart Association functional class (NYHA) ≥ II, EF ≤35%, elevated natriuretic peptides and either current hospitalization for HF or history of hospitalization/ emergency department visit for HF within a year were randomized to either placebo or omecamtiv mecarbil (pharmacokinetic‐guided dosing: 25, 37.5 or 50 mg bid). 8256 patients [male (79%), non‐white (22%), mean age 65 years] were enrolled with a mean EF 27%, ischemic etiology in 54%, NYHA II 53% and III/IV 47%, and median NT‐proBNP 1971 pg/mL. HF therapies at baseline were among the most effectively employed in contemporary HF trials. GALACTIC‐HF randomized patients representative of recent HF registries and trials with substantial numbers of patients also having characteristics understudied in previous trials including more from North America (n = 1386), enrolled as inpatients (n = 2084), systolic blood pressure < 100 mmHg (n = 1127), estimated glomerular filtration rate < 30 mL/min/1.73 m2 (n = 528), and treated with sacubitril‐valsartan at baseline (n = 1594). Conclusions: GALACTIC‐HF enrolled a well‐treated, high‐risk population from both inpatient and outpatient settings, which will provide a definitive evaluation of the efficacy and safety of this novel therapy, as well as informing its potential future implementation

The impact of changes in firm performance and risk on director turnover

Purpose – The purpose of this paper is to show that director turnover varies in predictable and intuitive ways with director incentives. Design/methodology/approach – The paper uses a sample of 51,388 observations pertaining to 13,084 directors who served 1,065 firms during the period 1997-2004. The data are obtained from RiskMetrics, Compustat, Execu-Comp, CRSP, IBES, and the Corporate Library databases. Portfolio analysis, logit, and GLIMMIX regression analysis are used for the tests. Findings – The paper provides evidence that directors are more likely to leave when firm performance deteriorates and the firm becomes riskier. While turnover increasing as firm performance deteriorates is consistent with involuntary turnover, directors are also more likely to leave in advance of deteriorating performance. The latter is consistent with directors having inside information and acting on that information to protect their wealth and reputation. When inside and outside director turnover is contrasted, the association between turnover and performance is stronger for inside directors. Research limitations – Since data are obtained from multiple databases, the sample may be biased in favor of larger firms. The results may, therefore, not be applicable to smaller firms. To the extent that the story is unable to differentiate between voluntary and involuntary director turnover, the results should be interpreted with caution. Originality/value – Even though extant research has looked extensively at the determinants of CEO turnover, little has been written on director turnover. Director turnover is an important topic to study, since directors, especially outside directors, possess a significant oversight role in the corporation.Company performance, Directors, Employee turnover, Risk analysis