Unemployment insurance and cash holdings of privately held firms around the world

2020 ◽  
Vol 28 (4) ◽  
pp. 188-209
Author(s):  
Marc Deloof ◽  
Yan Du ◽  
Tom Vanacker
Keyword(s):  
Unemployment Insurance ◽  
Cash Holdings ◽  
The World ◽  
Privately Held Firms ◽  
Privately Held

Taxes as a Determinant of Managerial Compensation in Privately Held Insurance Companies

2001 ◽  
Vol 76 (4) ◽  
pp. 655-674 ◽  
Author(s):  
Bin Ke
Keyword(s):  
Control Sample ◽  
Tax Planning ◽  
Managerial Compensation ◽  
Insurance Companies ◽  
Tax Rates ◽  
Investment Income ◽  
Federal Income Tax ◽  
Planning Decision ◽  
Privately Held Firms ◽  
Privately Held

This study empirically investigates how taxes affect managerial compensation for a sample of privately held insurers whose managers own a large percentage of the firm's stock (I refer to these as management-owned insurers) during 1989–1996. Shareholder/managers receive two types of income from the firm they own: compensation income as employees, and investment income as shareholders. Although compensation income is taxable to employees and deductible by employers, investment income is subject to double taxation. Thus, the mix of the two is an important tax-planning decision for management-owned insurers. I predict and find that as individual tax rates increased relative to corporate tax rates from 1989–1992 to 1993–1996, shareholder/managers paid themselves less tax-deductible compensation relative to a control sample of nonmanagement-owned insurers (i.e., privately held insurers with no managerial ownership). The study's results expand our understanding of management-owned, privately held firms' tax-planning strategies, and have implications for the efficiency of the federal income tax system.

scholarly journals Valuation And Market Timing In Private M&A Transactions

2011 ◽  
Vol 1 (8) ◽  
Author(s):  
Ted Azarmi ◽  
Florian Eisele ◽  
Christine Haecker
Keyword(s):  
Market Timing ◽  
Point Of View ◽  
Font Size ◽  
Private Companies ◽  
Maximum Price ◽  
Business Conditions ◽  
Privately Held Firms ◽  
Time Required ◽  
The Right ◽  
Privately Held

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;"><span style="font-family: Times New Roman;">The objective of this case is to teach and initiate a classroom discussion about the optimal market timing for the sale of a mid-cap privately held firm.<span style="mso-spacerun: yes;">&nbsp; </span>The discussion is facilitated by a real world case example that focuses on the sale of a Little Rock, AK based plastic injection molding company with approximately $20 million in revenues.</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 8pt;"><span style="font-family: Times New Roman;">&nbsp;</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;"><span style="font-family: Times New Roman;">Theoretical and practical issues central to receiving maximum price in relation to selling at the right time are addressed.<span style="mso-spacerun: yes;">&nbsp; </span>Considered are the desired time to close the deal from the owner&rsquo;s point of view, the time required for successful completion of the sale process, business conditions in this industry, firm-specific business conditions, and ability of agents to time this market.<span style="mso-spacerun: yes;">&nbsp; </span></span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 8pt;"><span style="font-family: Times New Roman;">&nbsp;</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;"><span style="font-family: Times New Roman;">This case also discusses various reasons for the sale of private companies and the effect of respective sale motives on the placement of these firms.<span style="mso-spacerun: yes;">&nbsp; </span>Principally, the retirement decision by the owners of small privately held firms as the most frequent reason for the sale of these companies is explored.</span></span></p>

Information asymmetry in CSR reporting: publicly-traded versus privately-held firms

2020 ◽  
Vol 11 (1) ◽  
pp. 207-232 ◽  
Author(s):  
L. Emily Hickman
Keyword(s):  
Information Asymmetry ◽  
Global Reporting Initiative ◽  
Publicly Traded ◽  
Private Companies ◽  
Content Type ◽  
Public Firms ◽  
Csr Reporting ◽  
Reporting Decisions ◽  
Privately Held Firms ◽  
Privately Held

Purpose This paper aims to investigate the motivations behind the publication of corporate social responsibility (CSR) reports, and particularly the effect of information asymmetry between firms and their owners. Design/methodology/approach A natural experiment contrasting the CSR reporting of private vs public firms is used to test whether the degree of information asymmetry is a significant factor in the decision to publish CSR reports. Using a hand-collected sample of the 239 largest US private companies matched with publicly-traded firms, the effect of these inherently different information environments on CSR reporting is tested through logistic regression. Factors suggested by stakeholder and legitimacy theories are tested for their differential impact on private vs public firms’ decisions to publish a CSR report. Findings Results indicate that private firms are less likely to publish a CSR report than similar public firms. Public firms also follow Global Reporting Initiative guidelines more frequently, consistent with signaling report quality to dispersed investors. A subsample of private companies facing greater information asymmetry is found to be similar to public firms in their reporting behavior, reinforcing the link between information asymmetry and CSR disclosure. Further analysis suggests that non-owner stakeholders play an important role in private companies’ CSR reporting decisions. Practical implications In addition to accounting and governance scholars, the findings should interest private firm managers preparing for an initial public offering (IPO), as the evidence suggests that CSR reporting is used to communicate information to dispersed investors. The insight into reporting motivations should be useful to accountants engaged in CSR consultation and assurance. Social implications With the growing attention paid to the CSR performance of firms, demonstrated by the growth in socially responsible investing, the study provides evidence that effective communication of CSR information to investors may play a key role in CSR-engaged firms’ disclosure strategies. Originality/value To the best of the author’s knowledge, this study is the first to analyze the CSR reporting decisions of a large sample of publicly-traded and privately-held firms. The results add to our understanding of what motivates firms to publish CSR reports, highlighting the importance of information asymmetry between the firm and its owners.

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