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Full-Text Articles in Business
Managers' Pay Duration And Voluntary Disclosures, Qiang Cheng, Young Jun Cho, Jae B. Kim
Managers' Pay Duration And Voluntary Disclosures, Qiang Cheng, Young Jun Cho, Jae B. Kim
Research Collection School Of Accountancy
Given the adverse effect on their welfare, managers are reluctant to disclose bad news in a timely fashion. We examine the effect of managers' pay duration on firms' voluntary disclosures of bad news. Pay duration refers to the average period that it takes for managers' annual compensation to vest. We hypothesize and find that pay durations can incentivize managers to provide more bad news earnings forecasts. This result holds after controlling for the endogeneity of pay duration. In addition, we find that the effect of pay duration is more pronounced for firms with weaker governance and with poorer information environments, …
Executive Equity Compensation And Earnings Management: A Quantile Regression Approach, Chih-Ying Chen, Ming-Yuan Li
Executive Equity Compensation And Earnings Management: A Quantile Regression Approach, Chih-Ying Chen, Ming-Yuan Li
Research Collection School Of Accountancy
Prior research has investigated the association between executive equity compensation and earnings management but the evidence is not conclusive. We investigate this question using the quantile regression approach which allows the coefficient on the independent variable (equity compensation) to shift across the distribution of the dependent variable (earnings management). Based on a sample of 18,203 U.S. non-financial firm-year observations from 1995 to 2008, we find that chief executive officer (CEO) equity compensation is positively associated with the absolute value of discretionary accruals at all quantiles of absolute discretionary accruals, but the association becomes weaker as the quantile decreases. The association …