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Overcon is one of the three 8Strong AC is the measure of auditcommittee strength defined in Section 3.2. Size is the natural log of total assets at the end of the fiscal year. Vega is the naturallogarithm of the change in CEO equity wealth due to a 1 percent change in the annualized standard deviation of stock returns.Delta is the natural logarithm of the change in CEO equity wealth due to a 1 percent change in the stock price. CEO Own isthe percentage of outstanding shares held by the CEO at the end of the fiscal year. City Leader is a dichotomous variableequal to one if the company’s auditor has the largest concentration of audit fees in the two-digit SIC industry of the citywhere the company is located,measures ofmanagerial overconfidence (Holder67, CAPEX, and Over-Invest) described in Section 3.1.
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