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The SEC Disclosure Requirement and Directors¡¯ Turnover Around Stock Repurchase

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  • Foued Hamouda
  • Jamel Eddine Henchiri

Abstract

The aim of this research is to outline board turnover when firms repurchase their own shares. Indeed, to control insiders¡¯ short-swing trading during repurchase events and protect outsiders against speculation, it is useful to know how boards are changed. We examine the introduction of the SEC 2004 disclosure requirement effectiveness on repurchase announcement returns and director¡¯s turnover in a sample of 764 companies over 1998 to 2013. In a broad cross-section of US firms, we argue that the SEC 2004 Rule appears to receive greater weight in turnover decision. However, the more insiders are entrenched into the board, the more they cannot be replaced easily even though 2004 disclosure Rule is adopted. We also find that a large number of board independencecontinue to explain the variation of board turnover.

Suggested Citation

  • Foued Hamouda & Jamel Eddine Henchiri, 2017. "The SEC Disclosure Requirement and Directors¡¯ Turnover Around Stock Repurchase," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(12), pages 77-85, December.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:12:p:77-85
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    References listed on IDEAS

    as
    1. Ikenberry, David & Lakonishok, Josef & Vermaelen, Theo, 1995. "Market underreaction to open market share repurchases," Journal of Financial Economics, Elsevier, vol. 39(2-3), pages 181-208.
    2. repec:bla:jfinan:v:53:y:1998:i:1:p:313-333 is not listed on IDEAS
    3. Weisbach, Michael S., 1988. "Outside directors and CEO turnover," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 431-460, January.
    4. Barber, Brad M. & Lyon, John D., 1997. "Detecting long-run abnormal stock returns: The empirical power and specification of test statistics," Journal of Financial Economics, Elsevier, vol. 43(3), pages 341-372, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    stock repurchase; firm performance; director¡¯s turnover; SEC rules;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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