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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

CEO Endowed Trait and Corporate Tax Planning : Evidence from Pilot CEOs

Baghdadi, Ghasan; Podolski, Edward; Veeraraghavan, Madhu - 2021

This paper investigates whether executives with thrill-seeking tendencies engage in greater tax avoidance. Our results show a strong negative association between CEO thrill-seeking and a firm’s cash effective tax rate. We further find that thrill-seeking has a considerably stronger effect on...

Persistent link: https://www.econbiz.de/10013236674

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

CFO co-option and CEO compensation

Dikolli, Shane S. - 2019

We study whether relative power in the CEO-CFO relationship influences CEO compensation. To operationalize relative power of a CEO over a CFO, we define CFO co-option as the appointment of a CFO after a CEO assumes office. We find that CFO co-option is associated with a CEO pay premium of about...

Persistent link: https://www.econbiz.de/10012903005

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

Earnings Management from the Bottom Up : An Analysis of Managerial Incentives Below the CEO

Oberholzer-Gee, Felix - 2012

Performance-based pay is an important instrument to align the interests of managers with the interests of shareholders …. However, recent evidence suggests that high-powered incentives also provide managers with incentives to manipulate the firm …'s reported earnings. The previous literature has focused primarily on Chief Executive Officers, but managers further down in the …

Persistent link: https://www.econbiz.de/10013112655

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

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

Firm Performance Implications of Using Qualitative Criteria in CEO Bonus Contracts

Feng, Nancy Chun - 2020

Many argue that the design of compensation contracts for public company chief executive officers (CEOs) is often not guided by a goal of value maximization. Yet, there is limited direct empirical evidence on the negative consequences of the proposed inefficient contracting between shareholders...

Persistent link: https://www.econbiz.de/10012853379