Better Bonus Plans for ESG

2020 ◽  
Author(s):  
Hermann J. Stern
Keyword(s):  
Bonus Plans

Cost Shielding in Executive Bonus Plans

2020 ◽  
Author(s):  
Matthew J. Bloomfield ◽  
Brandon Gipper ◽  
John Kepler ◽  
David Tsui
Keyword(s):  
Bonus Plans

scholarly journals Employment Horizon and the Choice of Performance Measures: Empirical Evidence from Annual Bonus Plans of Loss-Making Entities

2009 ◽  
Vol 55 (6) ◽  
pp. 890-905 ◽  
Author(s):  
Michal Matějka ◽  
Kenneth A. Merchant ◽  
Wim A. Van der Stede
Keyword(s):  
Empirical Evidence ◽  
Performance Measures ◽  
Bonus Plans

Additional evidence on bonus plans and income management

1995 ◽  
Vol 19 (1) ◽  
pp. 3-28 ◽  
Author(s):  
Jennifer J. Gaver ◽  
Kenneth M. Gaver ◽  
Jeffrey R. Austin
Keyword(s):  
Bonus Plans

Bonus plans

2007 ◽  
Vol 52 (5) ◽  
pp. 256
Keyword(s):  
Bonus Plans

scholarly journals Voluntary Clawback Adoption and the Use of Financial Measures in CFO Bonus Plans

2017 ◽  
Vol 93 (3) ◽  
pp. 213-235 ◽  
Author(s):  
Peter Kroos ◽  
Mario Schabus ◽  
Frank Verbeeten
Keyword(s):  
Decision Making ◽  
Internal Control ◽  
Audit Committees ◽  
Fiduciary Duties ◽  
Trade Off ◽  
Financial Measures ◽  
Financial Expertise ◽  
Abnormal Accruals ◽  
Internal Control Deficiencies ◽  
Bonus Plans

ABSTRACT Firms trade off CFOs' fiduciary duties against their decision-making duties when designing CFO bonus plans. Decreasing bonus incentives tied to financial measures benefits CFOs' fiduciary responsibilities at the expense of motivating their decision-making duties. As prior research indicates that clawbacks increase personal misreporting costs through the loss of previously awarded compensation, we examine whether clawbacks allow firms to increase incentives in CFO bonus contracts. Based on a sample of U.S. firms between 2007 and 2013, we find that clawbacks are associated with greater CFO bonus incentives. We also find the increase in incentives to be more pronounced for CFOs relative to other executives. Our results are moderated by firms' susceptibility to misreporting. The relation between clawbacks and incentives is weaker when firms experienced internal control deficiencies, have larger abnormal accruals, when CFOs are more vulnerable to pressure from CEOs, and when audit committees have less financial expertise and prestige.

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