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Management Earnings Forecasts as a Performance Target in Executive Compensation Contracts

Otomasa, Shota - 2017

, we find that the executive cash compensation is positively related to management forecast error (MFE) for a sample of …

Persistent link: https://www.econbiz.de/10012971568

Performance Consequences of Group Versus Individual Compensation Schemes for Senior Executives

Brown, Paul James; Matolcsy, Zoltan P.; Wells, Peter Alfred - 2008

This paper investigates the firm performance implications associated with the choice of individual versus group compensation schemes for senior executives below the CEO level. We define individual compensation schemes where senior executives are compensated independently from other senior...

Persistent link: https://www.econbiz.de/10014216413

Right on Schedule : CEO Option Grants and Opportunism

Daines, Robert - 2016

In the wake of the backdating scandal, many firms began awarding options at scheduled times each year. Scheduling option grants eliminates backdating, but creates other agency problems. CEOs that know the dates of upcoming scheduled option grants have an incentive to temporarily depress stock...

Persistent link: https://www.econbiz.de/10013006948

Litigation Risk and Agency Costs : Evidence from Nevada Corporate Law

Donelson, Dain C. - 2015

In 2001, Nevada significantly limited the personal legal liability of corporate officers and directors. We use this exogenous shock to implement a differences-in-differences design that examines the impact of officer and director litigation risk on agency costs. We find decreased firm value,...

Persistent link: https://www.econbiz.de/10013036235

Earnings Management Following Duality-Creating Successions : Ethnostatistics, Impression Management and Agency Theory

Davidson, Wallace N. - 2009

We relate impression and earnings management to the field of ethnostatistics, the study of how statistics are produced and managed. By further linking impression management and agency theory, we show that earnings management may exacerbate agency problems. We hypothesize that earnings-increasing...

Persistent link: https://www.econbiz.de/10013155839

Noise Hedging and Executive Compensation

Doherty, Neil A. - 2013

We address two apparent paradoxes of risk management: (1) managers hedge in order to avoid negative earnings surprises …, yet they tend to hedge risks uninformative of the value of the company; and (2) the presence of options in managers … informational asymmetry between insiders (managers) and outsiders (investors). Investors derive information about company value from …

Persistent link: https://www.econbiz.de/10013092522

The Presence, Value, and Incentive Properties of Relative Performance Evaluation in Executive Compensation Contracts

Bettis, J. Carr - 2014

Using data that includes specific contractual details of Relative Performance Evaluation (RPE) contracts granted to executives for 1,833 firms for the period 1998 to 2012, we develop new methods to characterize RPE awards and measure their value and incentive properties. The frequency in the use...

Persistent link: https://www.econbiz.de/10013059189

Product market peers and relative performance evaluation

Jayaraman, Sudarshan; Milbourn, Todd; Peters, Florian; … - 2017

We investigate the role of Relative Performance Evaluation (RPE) theory in CEO pay and turnover using a product similarity-based definition of peers (Hoberg and Phillips 2016). RPE predicts that firms filter out common shocks (i.e., those affecting the firm and its peers) while evaluating CEO...

Persistent link: https://www.econbiz.de/10011807920

Family Ownership and CEO Turnovers

Chen, Xia - 2014

This paper investigates the impact of the founding family's presence on CEO turnover decisions. We find that family firms managed by CEOs outside the founding family (i.e., professional CEO family firms) have higher CEO turnover-performance sensitivity than family firms managed by family members...

Persistent link: https://www.econbiz.de/10013064039

Institutional Ownership and CEO Equity Incentives

Bratten, Brian - 2017

This study provides new evidence on the relation between institutional ownership and the equity incentives provided to CEOs by their portfolio holdings of stock and stock options. We show that when firms' CEOs have abnormally high equity incentives, higher institutional ownership is associated...

Persistent link: https://www.econbiz.de/10012968161