Tim V. Eaton

Compared to other types of sustainability information, it remains uncommon for companies to report human rights information, and critics argue that when companies do report, they often report opportunistically. This is problematic as non-professional investors may rely on this information when making investment decisions. In this study, we use an experiment to examine how non-professional investors react to human rights information presented in varying formats (i.e., numerical, graphs, qualitative) compared to no reporting. Consistent with our expectations, we find that when information is positive, participants do not react to qualitative information. However, they react positively to numerical and graphical information and seem to use a less critical mindset when processing this type of information, which is associated in the literature with an “aura” of accuracy, objectivity, and neutrality. This is problematic because, similar to what is often the case in reality, participants had no certainty about the accuracy of the information. Further, when information is less positive, participants do not react to numerical or graphical information, but they do react negatively to qualitative information, which is more vague and may be perceived as companies trying to obfuscate less positive performance. We offer a critical discussion of our results.

What incentives do managers face that might give rise to inefficient investments in leases? If managers make inefficient investments in leases, what economic consequences arise for those managers and their firms? We develop a model of expected investments in leased assets and use the residuals from the model as proxies for inefficient investments. We find that, in contrast to investments in capital expenditures, leasing appears to be a mechanism through which managers can seemingly over-invest, even among firms with high quality financial reporting and negative free cash flows. Examining economic consequences, we predict and find that unexpected investments in leased assets trigger increasing future sales growth but declining future earnings growth for as long as three years ahead. We also find a negative relation with contemporaneous stock returns, suggesting investors view unexpected investments in leases as value destructive. Finally, despite negative returns consequences, we find that unexpected investments in leases are associated with higher CEO compensation driven primarily by future sales growth. Our study suggests that compensation contracts that reward growth may give managers’ incentives to drive sales growth with larger-than-expected investments in leased assets, which lead to slower future earnings growth and negative share price consequences for investors. Our results should inform managers and board members, investors, and researchers interested in investment efficiency, corporate governance, and leases.

Retirement planning is an issue of growing concern to the nations aging population and state governments as the number of retirees continues to increase each year. Retired individuals and individuals planning for retirement should consider state tax policies, as they vary from state to state, when selecting a retirement location. State governments should also consider making tax policy changes in order to attract the older population. State tax policies could impact a retirees financial stability during retirement. This paper examines the tax implications of geography in retirement and how relocation has the potential to significantly decrease an individuals pension income tax liability.