You can contact Joshua Spizman at email@example.com.
Joshua Spizman is an associate professor 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, and the Journal of Financial Markets.
At LMU, Josh mainly teaches "Introduction to Corporate Finance" and a "Capital Markets" elective course. From 2013 to 2016, he organized the California Corporate Finance Conference, an annual conference for junior faculty in the Southern California region hosted by Loyola Marymount University. He is currently the faculty moderator for the LMU Finance 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)
Do directors use information from their committee memberships to manage their directorships?The Financial Review (forthcoming)
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 (forthcoming)
We investigate earnings management around S&P 500 Index additions for added firms and their peers. Prior research shows that analysts make more upward (downward) revisions to the current earnings per share forecasts of added (peer) firms following Index addition. 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 that added firms continue with upward earnings management with no significant change. However, peer firms, not selected for Index inclusion, have significant reductions to upward earnings management. Our evidence suggests that Index eligibility creates an incentive for income increasing earnings management and that the Index addition announcement releases peer firms from pressure of Index inclusion.
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.