The dissertation analyzes three issues related to corporate environmental performance. In the first essay, I analyze the stock price reactions of the defendant firms and their peer firms to environmental lawsuits. Empirical evidence finds that the defendant and their peer firms experience negative and significant cumulative abnormal returns to the announcement of environmental lawsuits. Additionally, cross-sectional analyses find certain firm characteristics, such as profitability, growth opportunities and leverage can influence the market reaction. Furthermore, if the plaintiffs are government agencies or corporations instead of individual citizens, the defendant and peer firms experience higher negative market reactions. The second essay examines if a firm's environmental, social, and governance (ESG) performance can moderate the negative market response to environmental lawsuits. The results are mixed. The overall sample of the defendant and their peer firms show that ESG performance is not a significant factor in mitigating the negative market response. However, an interesting finding shows, for defendant and peer firms in the environmentally sensitive industries, better ESG ratings help reduce the adverse market reactions. The final essay investigates whether the defendant and peer firms improve their ESG performance in the next two years following the lawsuits. The results indicates that firms generally experience a drop in their ESG ratings in the year the lawsuits are filed. However, post-lawsuit filing years, there is a general trend for the defendant and peer firms in the environmentally sensitive industries to improve their environmental performance.

Companies have been known to reduce their costs by reducing their spending on employee benefits, but in the last decade there has been an increasing interest on how these decisions affect not just employee productivity and turnover, but also overall shareholder wealth and company profitability. This thesis seeks to answer whether companies that have a greater focus on their employee welfare and satisfaction are more financially stable and profitable than their competitors. The research and analysis consists of 40 companies, 20 highly rated by their employees paired with 20 of the worst companies according to employee opinion and benefits. Each pair must consist of comparable companies based on their industry and size. All companies are also part of Fortune 1000 and must be publicly traded. After conducting multiple tests on the data collected for each company and industry, the results support the hypothesis of a positive correlation between employee spending and shareholder wealth.

This study investigates what impact mergers and acquisitions have on bank efficiency by examining both pre-merger and post-merger performance. Specifically, the research looks at the effect of bank efficiency on shareholder wealth creation upon bank merger announcement. The study finds supportive evidence that the market takes into account the pre-merger bidder bank’s efficiency in adjusting the bank stock’s price at the time of announcement. This suggests that bank efficiency has a significant positive effect on shareholder wealth creation when a merger is announced. Furthermore, in reacting to the announcement, the market also perceives the prospects for future enhancement of bank efficiency as a result of the current event. Thus, post-merger bank efficiency is found to also contribute to shareholder value creation on merger announcement. In particular, the study finds evidence suggesting that post-merger profit efficiency, rather than cost efficiency, has a positive effect on cumulative abnormal returns. The study investigates 56 commercial bank mergers that took place in 22 European countries between 2001 and 2007. The event study methodology is used to determine shareholder wealth creation, employing the market model in estimating expected returns. Efficiency is estimated using the parametric stochastic frontier approach. Performance improvement in the combined firm is obtained by comparing post-merger efficiency with pre-merger efficiency, which is the sum of bidder and target efficiencies after weighting them based on their pre-merger total assets. To find out whether efficiency has an effect on shareholder value creation, regression analyses are performed involving cumulative abnormal returns, a few efficiency variables, and a number of control variables. The main finding of this study is that pre-merger bank efficiency contributes to short-term shareholder value creation upon merger announcement. Some evidence is also found that post-merger bank efficiency has a positive effect on shareholder value creation at announcement time which is associated more with profit efficiency than with cost efficiency. Also, as the study finds statistically significant positive cumulative abnormal returns, the results of this study are supportive of the view that, increasingly, European merger studies that examine post-2000 data find that bank mergers are value-creating even for the bidding firms. Evidence that pre-merger bank efficiency has a positive effect on cumulative abnormal returns, and that the market takes into account perceived future bank efficiency on merger announcement, underscores the importance of efficiency as a performance measure. If how the market reacts to a merger announcement reflects future efficiency performance, shareholders, policy makers, and other stakeholders may be able to take that as one of the factors on which they can base their decisions regarding the yet uncompleted merger. They can also use previous efficiency records for predicting short-term and long-term performance of prospective parties to a merger before announcement.

Shareholders can utilize internal and external governance mechanisms to minimize agency costs. Internal governance mechanisms purport to improve the alignment between shareholders' interests and those of management by empowering the board of directors, setting value-maximizing compensation packages, employing leverage, and using other internal policies. Extensive discussion on corporate governance and regulations has motivated financial experts to conduct research on governance mechanisms and their relations to firm value. This study is focused on one particular aspect of corporate governance, which is executive compensation. Specifically, this study investigates executive compensation restrictions during the regulatory period and their effect on the performance of firms that received Troubled Asset Relief Program (TARP) funds. TARP is a U.S. government program intended to restore the U.S. economy by purchasing assets and equities from troubled institutions. This study is important since it showcases the efficacy of government regulations to revamp unsound executive compensation and governance practices. It also contributes to the governance and regulatory literature by showing whether the public and shareholders benefit from the compensation rules. Using a clean sample of 84 public TARP firms that received at least $50 million from the government, with the period of analysis from 2003 to 2010, I find that firm performance is positively and significantly related to total compensation as well as to both of its components, i.e., equity-based pay and cash-based compensation. However, the magnitude of the relationship between cash compensation and firm performance is much lower than that for equity-based compensation. Testing the pay-for-performance sensitivity in three sub-periods of analysis, the findings show that the relationship between executive compensation and firm performance was significantly positive in the pre-crisis period. However, during the financial crisis and the regulatory periods, this relation was not statistically different from that during the pre-crisis period. During the crisis period, TARP firms did not make necessary adjustments to executive compensation despite the fact that they had been faced with financial difficulties. I also find that the change in firm value is negatively and significantly related to the change in total compensation for TARP firms that have paid back their debts to the government by December 11, 2009, but this relation is less negative than that for TARP firms that have not repaid the bailout money.

In the last decade Corporate Social Responsibility (CSR) has become increasingly important and multiple corporations that have been exposed for unethical behavior have been harshly penalized by the market. This study aims at evaluating wealth effects of unethical corporate behavior by doing a case study, in which an in-depth analysis is conducted on four infamous corporate scandals; Wells Fargo, HSBC, Danske Bank, and Volkswagen. Share prices are compared to an approximation of what the prices could have been, had the scandals not been revealed, to give an indication on abnormal returns around the announcement of the corporate scandals. The approximation is based on the share’s previous correlation with market returns. Results of the study are then contrasted to and analyzed with regard to findings of previously conducted event studies on the wealth loss suffered due to exposed unethical behavior. It is found that the corporate scandals resulted in substantial direct wealth losses in terms of market cap value and shareholder wealth for two of our cases, Wells Fargo and Volkswagen. The value decrease that Danske Bank suffered was also substantial, but had a lag in discernible market reactions in comparison to Wells Fargo and Volkswagen. HSBC has in recent years been lagging behind our price approximation, but any direct negative effect from the scandal announcement cannot be observed.

Existem evidências sobre a diferenciação entre empresas pré-operacionais e empresas operacionais em aspectos relacionados com a estrutura de ativos, a estrutura de capital, a rentabilidade de ativos, oportunidades de crescimento e a reação do mercado à divulgação financeira. Essas diferenças apontam que projetos de investimento afetam diversos aspectos da empresa e geram expectativas no mercado quanto à geração futura de resultados. A pesquisa foi realizada analisando-se empresas do mercado de capitais brasileiro divididas em duas amostras ou grupos de empresas: pré-operacionais e operacionais. Foram realizados dois testes. O primeiro, a partir de informações financeiras divulgadas trimestralmente com o cálculo de indicadores econômico-financeiros, em que se verificaram diferenças de médias. O segundo, a partir das datas de divulgação dos relatórios financeiros, em que se verificou, com o auxílio da técnica de estudo de eventos, que há diferença estatística significativa dos retornos anormais acumulados entre essas duas amostras em razão da reação do mercado à divulgação financeira, denotando sua importância como componente informativo para ajustes dos preços das ações. Adicionalmente, foi estendido o teste de estudo de evento para analisar a reação do mercado à divulgação das menores e maiores variações dos ativos não circulantes. Esta variável é utilizada no estudo como proxy dos esforços da empresa na formação de capital produtivo, verificando-se que o mercado não reagiu às baixas variações desse ativo. No entanto, o mercado reage de forma limitada à informação quando a variação desse ativo está entre as maiores variações. Embora os resultados dos testes estejam limitados às amostras utilizadas, fornecem uma direção no sentido de entender as mudanças nos fundamentos de valor dessas empresas. / There is evidence about the differentiation between pre-operational and operational companies on aspects related to the structure of assets, capital structure, asset profitability, growth opportunities and market reaction to financial disclosure. These differences indicate that investment projects affect many aspects of the company and generate market expectations about the future generation of results. The survey was conducted by analyzing companies in the Brazilian capital market divided into two samples or groups of companies: preoperational and operational. Two tests were performed. The first, from the quarterly financial information disclosure with the calculation of economic-financial indicators. Differences of means were observed. The second, from the disclosure date of the financial reports. It was observed with the help of the technique of event studies, significant statistical difference of abnormal cumulative returns between these two samples as a result to the market reaction on the financial disclosure, denoting its importance as an informational component for adjustment of stock prices. Additionally, the event study test was extended to analyze the market reaction to the disclosure of minor and major changes in non-current assets. This variable is used in the study as proxy of the company\'s efforts in the formation of capital efficiency. It was observed that the market did not react to the low variations of this asset. However, the market limitedly reacted to the information when the variance of this asset is among the largest variations. Although the test results are limited to the samples used, provides a direction in order to understand the changes in the fundamentals of value of these companies.

This dissertation includes two related chapters that investigate corporate governance. In the first chapter, we examine the effectiveness of board monitoring on CEOs. It is widely believed that outsider boards are better monitors. In fact, regulations now require that the board of directors of publicly traded firms be composed of a majority of independent directors (or outsiders). However, this paper documents that an insider-dominated board can monitor the CEO just as well as an outsider board can when the firm's CEO is hired from outside. The results suggest that what matters is not so much as the structure of the board, but the "independence" between the board and the CEO it monitors. Specifically, we find that insider boards monitor more of their firms' CEOs if the CEO is hired from outside than from within. In addition, outsider boards monitor both inside and outside CEOs the same way. We also find little difference between insider and outsider boards when they monitor outside CEOs. The main contribution of this paper is to show that an insider board can be an effective monitor as long as it is independent of the CEO. In other words, what is important is board independence, not board structure per se. In chapter two, we examine the relation between the change in a firm's value and its CEO selection sources: internal promotion versus external hire in both high and low product competition environments. Our results show that firms will be better off hiring an outside CEO (external hire) when the firms operate in a low product competition industry. Specifically, the evidence shows that hiring an outside CEO for a firm in a low product competition industry will increase the firm's value by about 3% for the entire tenure of the CEO. The main contribution of this paper is to show that product market competition is an important factor in CEO selection.

Existem evidências sobre a diferenciação entre empresas pré-operacionais e empresas operacionais em aspectos relacionados com a estrutura de ativos, a estrutura de capital, a rentabilidade de ativos, oportunidades de crescimento e a reação do mercado à divulgação financeira. Essas diferenças apontam que projetos de investimento afetam diversos aspectos da empresa e geram expectativas no mercado quanto à geração futura de resultados. A pesquisa foi realizada analisando-se empresas do mercado de capitais brasileiro divididas em duas amostras ou grupos de empresas: pré-operacionais e operacionais. Foram realizados dois testes. O primeiro, a partir de informações financeiras divulgadas trimestralmente com o cálculo de indicadores econômico-financeiros, em que se verificaram diferenças de médias. O segundo, a partir das datas de divulgação dos relatórios financeiros, em que se verificou, com o auxílio da técnica de estudo de eventos, que há diferença estatística significativa dos retornos anormais acumulados entre essas duas amostras em razão da reação do mercado à divulgação financeira, denotando sua importância como componente informativo para ajustes dos preços das ações. Adicionalmente, foi estendido o teste de estudo de evento para analisar a reação do mercado à divulgação das menores e maiores variações dos ativos não circulantes. Esta variável é utilizada no estudo como proxy dos esforços da empresa na formação de capital produtivo, verificando-se que o mercado não reagiu às baixas variações desse ativo. No entanto, o mercado reage de forma limitada à informação quando a variação desse ativo está entre as maiores variações. Embora os resultados dos testes estejam limitados às amostras utilizadas, fornecem uma direção no sentido de entender as mudanças nos fundamentos de valor dessas empresas. / There is evidence about the differentiation between pre-operational and operational companies on aspects related to the structure of assets, capital structure, asset profitability, growth opportunities and market reaction to financial disclosure. These differences indicate that investment projects affect many aspects of the company and generate market expectations about the future generation of results. The survey was conducted by analyzing companies in the Brazilian capital market divided into two samples or groups of companies: preoperational and operational. Two tests were performed. The first, from the quarterly financial information disclosure with the calculation of economic-financial indicators. Differences of means were observed. The second, from the disclosure date of the financial reports. It was observed with the help of the technique of event studies, significant statistical difference of abnormal cumulative returns between these two samples as a result to the market reaction on the financial disclosure, denoting its importance as an informational component for adjustment of stock prices. Additionally, the event study test was extended to analyze the market reaction to the disclosure of minor and major changes in non-current assets. This variable is used in the study as proxy of the company\'s efforts in the formation of capital efficiency. It was observed that the market did not react to the low variations of this asset. However, the market limitedly reacted to the information when the variance of this asset is among the largest variations. Although the test results are limited to the samples used, provides a direction in order to understand the changes in the fundamentals of value of these companies.

This dissertation includes two related chapters that investigate the value of multiple directorships. In the first chapter, I focus on potential tradeoffs between the costs and benefits of multiple directorships held by outside directors and attempt to determine how firm characteristics affect such tradeoffs. It is widely believed that outside directors of a firm play important functions of monitoring and advising. As a result, the basic hypothesis of the first essay is that multiple directorships by outside directors can have different implications for firms that have different levels of monitoring and advising needs. Consistent with this hypothesis, the evidence suggests that firm performance is positively associated with multiple directorships for firms with high growth opportunities and low agency conflicts. Such firms would benefit more from better advising while not suffering much from less monitoring. Likewise, firm performance is negatively associated with multiple directorships for firms with low growth opportunities and high agency conflicts. In the second essay, I examine how multiple directorships held by outside directors affect shareholder wealth during acquisitions. The evidence indicates that not all busy outside directors have the same effect and some types of busy outside directors may benefit the firms.

Cette thèse a pour objectif de démêler la nature de la relation entre « actionnariat salarié » et « création de valeur », dans le cadre de la gouvernance actionnariale et partenariale. Les principaux résultats dégagés montrent que la relation entre « actionnariat salarié » et « création de valeur actionnariale » est curvilinéaire prenant la forme de U-inversé : elle est positive pour des niveaux faibles d’actionnariat salarié et négative si le pourcentage de droits de vote revenant aux salariés dépasse 3%. Aussi, un effet positif de l’ « actionnariat salarié » sur la « part de la valeur créée allouée aux salariés » est constaté, et ce uniquement pour un actionnariat salarié significatif. Au dessous du taux de 3%, le pourcentage du capital et le pourcentage des droits de vote détenus par les salariés ne montrent aucune influence significative. Quant à l’étude de l’influence de certains mécanismes de contrôle sur la relation étudiée, les principaux résultats dégagés se résument comme suit : Au-delà du seuil stratégique légal de 33%, la concentration du capital semble avoir un effet de modération positif sur la relation actionnariat salarié - création de valeur actionnariale et la relation actionnariat salarié - part de la valeur créée allouée aux salariés. La propriété managériale, si elle dépasse le seuil stratégique légal de 33%, semble modérer négativement la relation actionnariat salarié - création de valeur actionnariale et positivement la relation actionnariat salarié - part de la valeur créée allouée aux salariés. La participation de salariés actionnaires au conseil modère négativement la relation entre « actionnariat salarié » et « création de valeur actionnariale » ; alors qu’elle modère positivement la relation entre « actionnariat salarié » et « part de la valeur créée allouée aux salariés ». / The present thesis investigates the nature of relationship between the employee stock ownership and the wealth creation, in the framework of the shareholder governance and the stakeholder governance. Results indicate a non linear relation between both the employee stock ownership and the shareholder value creation taking an inversed-U form. In fact, a positive relation associates these variables for low levels of employee stock ownership. Starting from a level of 3%, the relation became negative. Results notice also a positive impact of employee stock ownership plan on the share of value allocated to employees when the percentage of employee stock ownership is significant. Under than 3% the employee stock ownership and the voting rights held by the employees presents a non significant impact. The principal results on the influence of certain mechanisms of control on the studied relationship between the employee stock ownership plan and the wealth creation are summarized as follows : Beyond the legal strategic level of 33%, the concentration of capital seems to have a positive moderating effect on the relation employee stock ownership plan – shareholder wealth creation and the relation employee stock ownership plan - share of the wealth allocated to the employees. The management ownership if exceeds the legal strategic level of 33% seems to exert a negative moderating effect on the relation between employee stock ownership and shareholder wealth creation but a positive one on the relation between the employee stock ownership and the share of the wealth allocated to the employees. The presence of the employees’ shareholder in the board of directors moderates negatively the relationship between the employee stock ownership plan and the shareholder wealth creation and positively that between the employee stock ownership plan and the share of the wealth allocated to the employees.