This study investigates whether CEOs exercise discretion in recognizing environmental liabilities surrounding their turnover. Extant theories on the agency problem predict that outgoing CEOs tend to boost or maintain the reported earnings in their final years (“Horizon” problem or...

We find the likelihood of forced turnover in the CEO and CFO positions is significantly higher in the aftermath of option backdating than in propensity-score-matched control firms. Forced turnover occurs in about 36 percent of the accused firms. The forced turnover rates for CEOs and CFOs are...

We find the likelihood of turnover in the CEO and CFO positions is significantly higher in the aftermath of option backdating (in comparison to industry-matched and propensity-score-matched control firms). Turnover is particularly high for severe cases of backdating, namely, when a regulatory...