Work

Accounting earnings and executive compensation:

Year: 1998

Type: article

Abstract: A cross-sectional analysis of cash compensation paid to CEOs of 713 US firms reveals that the sensitivity of compensation to earnings varies directly with earnings persistence. Additional analysis indicates that this sensitivity is greater for cases where executives are approaching retirement. Such evidence suggests the use of earnings persistence to counterbalance adverse consequences of earnings-based contracting with managers who face finite decision horizons.

Source: Journal of Accounting and Economics

DOI: 10.1016/s0165-4101(98)00021-4

Authors: William R. Baber, Sok-Hyon Kang, Krishna R. Kumar

Institutions: George Washington University, Yale University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $4,170