Research Seminar Incentives of financial analysts: trading turnover and compensation | ISM
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Research Seminar Incentives of financial analysts: trading turnover and compensation

2019-05-02
ISM kindly invites to participate in Research Seminar "Incentives of financial analysts: trading turnover and compensation" led by Egle Karmaziene, Assistant Professor at the University of Groningen and a visiting researcher at the Swedish House of Finance (SHOF).
 
Seminar will take place on the 2nd of May, 11:30, room 412.
 
Abstract
 
Are sell-side security analysts paid for turnover-generating research? Using hand-collected annual income data from tax records in Sweden, I show that analysts' compensations increase in the trading turnover that their recommendations generate. Analysts are paid 0.002 percent of broker-trading volume, or approximately 1 percent of broker's commission revenues. I find a significant broker-turnover analyst-pay relationship only in the post-global-settlement period, and the relation is strongest for investment banking clients' stocks. Additional analyses indicate that the relationship is significant only for the more experienced analysts and for positive recommendations. These findings empirically validate the previously assumed turnover-compensation link and may have policy implications related to the Markets in Financial Instruments Directive
 
Speaker bio
 
Egle Karmaziene is an Assistant Professor at the University of Groningen and a visiting researcher at the Swedish House of Finance (SHOF). She obtained her doctoral degree in 2016 at the Stockholm School of Economics. Currently, Egle's research is mainly focused on financial intermediation, corporate finance, and corporate governance. 
 
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