scholarly journals CEO Compensation Incentives and Playing It Safe: Evidence from FAS 123R

2021 ◽  
Author(s):  
Nicholas F. Carline ◽  
Oksana Pryshchepa ◽  
Bo Wang
Keyword(s):  
Ceo Compensation ◽  
Compensation Incentives

Managerial incentives and accounts receivable management policy

2018 ◽  
Vol 44 (7) ◽  
pp. 865-884 ◽  
Author(s):  
Haibo Yao ◽  
Yiling Deng
Keyword(s):  
Ceo Compensation ◽  
Market Value ◽  
Equity Market ◽  
Management Policy ◽  
External Financing ◽  
Content Type ◽  
Accounts Receivable ◽  
Negative Relation ◽  
Regression Methods ◽  
Compensation Incentives

Purpose Previous research has documented that high vega CEOs increase R&D investment (Coles et al., 2006) and liquidity (Liu and Mauer, 2011), but provided little clue about how those CEOs get the necessary resources to support those choices. Frankel et al. (2016) highlight firms’ compensation incentives to manipulate working capital components, the authors use accounts receivable as an example to illustrate. The paper aims to discuss these issues. Design/methodology/approach The authors employ sorting, and various regression methods and adjust the Faulkender and Wang (2006) model to test two hypotheses. Findings The authors find a negative relation between managerial risk-taking incentives (vega) and accounts receivable and a negative relation between vega and the market value of accounts receivable to shareholders. Research limitations/implications The authors do not compare PPE investment, external financing with accounts receivable to figure out whether accounts receivable is better and more efficient to adjust. Practical implications The evidence primarily supports the internal allocation hypothesis that high vega managers reduce the accounts receivable investment and that the equity market discounts the value of accounts receivable for high vega firms. Social implications Equity holders should consider the internal allocation effect when setting CEO compensation incentives, also they should be cautious when CEOs change their accounts receivable management policy. The equity market discounts the value of accounts receivable for high vega firms. Originality/value This study provides important information about the CEO compensation incentives, a new explanation about the formation of accounts receivable management policy, and the market value implication of accounts receivable.

The Interrelationships Between Information Technology Spending, CEO Equity Incentives, and Firm Value

2014 ◽  
Vol 28 (2) ◽  
pp. 41-65 ◽  
Author(s):  
Adi Masli ◽  
Vernon J. Richardson ◽  
Juan Manuel Sanchez ◽  
Rodney E. Smith
Keyword(s):  
Information Technology ◽  
Firm Value ◽  
Ceo Compensation ◽  
It Governance ◽  
Business Value ◽  
Risky Asset ◽  
Equity Compensation ◽  
Equity Incentives ◽  
Compensation Incentives

ABSTRACT We examine the interrelationships between information technology spending, CEO equity compensation incentives, and firm value. We present two related pieces of evidence. First, we find that CEO equity incentives are associated with IT spending, suggesting that CEOs with higher incentives are more likely to invest in a risky asset such as IT. Second, we find that the association between IT spending and business value is stronger for firms that grant CEOs higher equity incentives. Our study contributes to the CEO compensation and IT governance literatures.

scholarly journals The Non-Linear Relationship Between CEO Compensation Incentives And Corporate Tax Avoidance

2017 ◽  
Vol 33 (3) ◽  
pp. 439-450 ◽  
Author(s):  
Seungmin Chee ◽  
Wooseok Choi ◽  
Jae Eun Shin
Keyword(s):  
Executive Compensation ◽  
Linear Relationship ◽  
Ceo Compensation ◽  
Tax Avoidance ◽  
Corporate Tax ◽  
Non Linear ◽  
Prior Literature ◽  
Low Levels ◽  
Risk Reducing ◽  
Compensation Incentives

This study examines the effect of CEO compensation incentives on corporate tax avoidance. Unlike prior literature that assumes a monotonic relation between executive compensation incentives and tax avoidance, we find a non-linear relation between the two. Specifically, we find that CEO compensation incentives exhibit a positive relation with corporate tax avoidance at low levels of compensation incentives, whereas they show a negative relation at high levels of compensation incentives. We further find that the non-linear relationship between CEO compensation incentives and corporate tax avoidance does not exist for the subsample of S&P500 firms. Collectively, we provide evidence of the two counter effective forces, namely, - the incentive alignment effect and the risk-reducing effect, - that help explain the effect of CEO compensation incentives on tax avoidance.

CEO Compensation Incentives and Pro Forma Earnings Disclosures

2013 ◽  
Author(s):  
Dirk E. Black ◽  
Ervin L. Black ◽  
Theodore E. Christensen ◽  
Kurt H. Gee
Keyword(s):  
Ceo Compensation ◽  
Pro Forma Earnings ◽  
Earnings Disclosures ◽  
Pro Forma ◽  
Compensation Incentives
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