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Mark Soliman specializes in financial reporting information, trading strategies, capital markets, debt ratings voluntarily disclosure, especially non-GAAP earnings. He has held positions at The Stanford Graduate School of Business and the Foster School at the University of Washington where he was the recipient of numerous teaching awards. Outside of academia, he was vice president of accounting-based research at Citadel Investment Group in Chicago and consulted extensively for Renaissance Technologies, helping them to develop trading strategies for their hedge fund. Professor Soliman has published extensively in the top journals including the Journal of Accounting and Economics, the Journal of Accounting Research, The Accounting Review, The Review of Accounting Studies, Management Science and Contemporary Accounting Research. He is the recipient of numerous fellowships and awards, including the Notable Contribution to the Accounting Literature in 2009 along with the Best Paper award at several conferences. He is on the editorial board of the Journal of Accounting Research, The Accounting Review and The Review of Accounting Studies. Professor Soliman is also a CPA in the state of California and Washington (inactive). He is also a triathlete recently completing the Ironman distance in Coeur D’Alene in Idaho.
RESEARCH + PUBLICATIONS
Non-GAAP earnings provide managers the flexibility to exclude GAAP items to produce a more informative performance measure; however, the flexibility afforded to managers provides them the ability to opportunistically exclude recurring expenses from non-GAAP earnings. Prior literature focuses on the use of this form of disclosure at the firm level, although it is ultimately management’s decisions. We extend prior non-GAAP literature by providing evidence that CEO personality traits influence the use and quality of non-GAAP earnings. We focus our analysis on CEO narcissism. We find narcissistic CEOs are more likely to exclude expenses from non-GAAP earnings and that the magnitude of exclusions is greater. We find that non-GAAP exclusions are more persistent with narcissistic CEOs. Our results shed light on why firms disclose non-GAAP earnings and contributes to prior CEO narcissism research by highlighting how narcissistic CEOs are more likely to take advantage of the discretion in financial reporting disclosures.
Implied equity duration was originally developed to analyze the sensitivity of equity prices to discount rate changes. We demonstrate that implied equity duration is also useful for analyzing the sensitivity of equity prices to pandemic shutdowns. Pandemic shutdowns primarily impact short-term cash flows, thus they have a greater impact on low-duration equities. We show thatimplied equity duration has a strong positive relation to U.S. equity returns and analyst forecast revisions during the onset of the 2020 COVID-19 shutdown. Our analysis also demonstrates that the underperformance of “value” stocks during this period is a rational response to their lower durations.
This paper investigates whether different levels of investor protection affect the market valuation of Non-Controlling Interests (NCI)’ share of subsidiaries in a consolidated entity. Using a set of European publicly listed firms, our findings suggest a positive (negative) association of NCI with parent companies’ share prices in countries with low (high) levels of investor protection. We interpret the findings as evidence that when non-controlling investors are not well protected, parent companies have an opportunity to extract rents from non-controlling owners, which leads to a positive valuation of NCI’s equity. However, in countries where non-controlling investors are well protected, parent companies are not able to extract rents but still must monitor and govern the related subsidiary so NCI becomes a net cost and the relation flips.