You can contact Joshua Spizman at firstname.lastname@example.org.
Joshua Spizman is a professor of finance and chair of the Department of Finance at Loyola Marymount University. He joined LMU in 2011 after completing his Ph.D. in finance at Binghamton University. Josh’s research interests are in capital markets, corporate finance, and public finance. His research has been published in the Journal of Financial Economics, Journal of Banking and Finance, Journal of Financial Markets, and The Financial Review.
At LMU, Josh teaches introductory corporate finance, an upper division course covering capital markets, and in the Executive MBA program. Along with his colleague, Dr. Hai Tran, Josh helped to develop a course around using Bloomberg Terminals to conduct equity research. In 2018, he started the LMU Stock Pitch Competition, an annual event for LMU students to practice and build their valuation and presentation skills. As chair of the CBA Undergraduate Program Committee, he led the college to design a new undergraduate business core curriculum that was implemented in fall 2020. In addition to his duties as Department Chair, he is also faculty moderator for the Finance Society and Lion Investing Society.
Binghamton University : Ph.D., Finance 2010
Binghamton University: B.S., Mathematical Sciences 2005
Honors in Mathematical Sciences and Magna Cum Laude
Areas of Expertise (2)
Industry Expertise (2)
Board committees and director departuresThe Financial Review
We examine whether directors utilize private information obtained through their committee memberships to depart from firms prior to the revelation of their poor performance. Such departures raise the concern that directors leave the firm when they are most needed. Utilizing private information to make decisions in their personal interest may also violate the directors’ fiduciary duties. We focus on departures of audit committee members since information regarding earnings quality should be available to them prior to public release. The departure of audit committee members who serve on multiple boards is coincident with a deterioration in earnings quality. Other directors do not appear to time their departure based on declines in earnings quality. Results from examining the reasons behind this finding are consistent with the director's preference to lead a “quiet life” and a desire to lower their exposure to litigation risk rather than to protect their reputation in the director market.
Added Pressure to Perform: The Effect of S&P 500 Index Inclusion on Earnings ManagementQuarterly Journal of Finance and Accounting
We investigate earnings management around Standard and Poor's 500 Index (S&P 500 Index) additions for added firms and their peers. We use discretionary accruals as a proxy for earnings management and find upward earnings management for added and peer firms prior to the S&P 500 Index addition announcement. Following Index addition, we find divergence in the earnings management activities of added and peer firms. Added firms continue with upward earnings management with no significant change, whereas peer firms, not selected for Index inclusion, significantly reduce upward earnings management. Our evidence is consistent with increased pressure in the year leading up to Index addition for both added and peer firms and continued pressure on added firms following selection into the Index. Our findings suggest that income increasing earnings management may contribute to the observed positive market response to S&P 500 Index additions.
The Effect of Distracted Audit Committee Members on Earnings QualityReview of Quantitative Finance and Accounting
In this paper, we examine the impact of distracting events to audit committee members on the firms’ earnings quality. Specifically, we focus on major events occurring simultaneously at other firms in which the audit committee members also serve as board members or CEOs. We find that during the years of major events, the number of board meetings at event firms significantly increases while there is no difference in board meetings at non-event firms. During this period, distracted directors miss more board meetings at the non-event firms than non-distracted directors. Consequently, firms with more distracted audit committee members have lower earnings quality. Our results indicate that director distractions, not director busyness, are associated with the decline in earnings quality. Notably, this decline in earnings quality at non-event firms is confined to the distraction years and audit committee members only. Our results have implications for shareholders and policy makers in assessing the tradeoffs between hiring experienced, qualified directors and the potential distractions that may result from their other commitments.
The Value of the Wildcard Option in Cash-Settled American Index OptionsJournal of Financial Markets
We estimate the size of the wildcard premium embedded in cash-settled American-style options. Similar to simulation results reported by Fleming and Whaley (1994), we find the wildcard premium significantly impacts the valuations of American-style put and call options. Furthermore, we find that the wildcard premium as a percentage of price is somewhat larger than the Fleming-Whaley simulation in periods of low implied volatility but not in periods of high volatility. Finally, we show a correlation between the size of the wildcard premium and overnight S&P 100 overnight returns. We believe that these results shed light on why all newly created cash-settled options have a European style exercise component.
Government policy and ownership of equity securitiesJournal of Financial Economics
Since World War II, direct stock ownership by households across the globe has largely been replaced by indirect stock ownership by financial institutions. We argue that tax and retirement policies are among the factors behind these changes.
The tax benefit of income smoothingJournal of Banking and Finance
A worker can contribute pre-tax dollars to a private pension plan. Under a progressive income tax, this feature reduces lifetime tax liability. There is a long-held belief that the tax benefit to postponing income tax liability until retirement is large. We find that the tax benefit of income smoothing under the United States 2010 federal tax code is surprisingly small. This conclusion is of considerable importance to investment advisers, tax policymakers, and scholars engaged in financial retirement planning.
Accounting, Finance and Adverse Selection: Illustrations and ApplicationsJournal of Accounting Literature
Markets are rife with inefficiencies caused by information asymmetry. We use numerical examples to illustrate one such inefficiency, adverse selection.We relate our abstract illustrations to important concepts in accounting and finance. We consider both disciplines jointly because accounting information is useful in mitigating the market inefficiencies studied in finance. The goal is to make exposition accessible to faculty, students and practitioners.