A detailed analysis of 49 firms subject to AAERs suggests that approximately one-quarter of the misstatements meet the legal standards of intent. In the remaining three quarters, the initial misstatement reflects an optimistic bias that is not necessarily intentional. Because of the bias,...

We examine the implications of regulatory intervention in pay-setting, by studying whether executive compensation restrictions associated with the Troubled Asset Relief Program (TARP) influence banks' participation in the program. We find that banks more likely to be impacted by the restrictions...

Using a sample of more than 1,500 US public firms in the period 1998-2016, we examine how firms endogenously adjust CEO compensation contracts when they become financially distressed. The link between compensation and equity-based measures of firm performance is positive and strong prior to...