The DOI matches its Crossref record; 35 of the 35 references it cites were found in a registry or an index.
Board Committees, CEO Compensation, and Earnings Management
Abstract
ABSTRACT:We analyze the board of directors' equilibrium strategies for setting CEO incentive pay and overseeing financial reporting and their effects on the level of earnings management. We show that an increase in CEO equity incentives does not necessarily increase earnings management because directors adjust their oversight effort in response to a change in CEO incentives. If the board's responsibilities for setting CEO pay and monitoring are separated through the formation of committees, then the compensation committee will increase the use of stock-based CEO pay, as the increased cost of oversight is borne by the audit committee. Our model generates predictions relating the board committee structure to the pay-performance sensitivity of CEO compensation, the quality of board oversight, and the level of earnings management.
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Cites
The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems
JENSEN, M. C. (1993) · The Journal of Finance · doi:10.1111/j.1540-6261.1993.tb04022.x · Cited by 8,528
Higher market valuation of companies with a small board of directors
Yermack, D. (1996) · Journal of Financial Economics · doi:10.1016/0304-405x(95)00844-5 · Cited by 6,603
The economic implications of corporate financial reporting
Graham, J. R., Harvey, C. R., & Rajgopal, S. (2005) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2005.01.002 · Cited by 6,316
Multitask principal – agent analyses: Incentive contracts, asset ownership, and job design
Holmstrom, B., & Milgrom, P. (1991) · The Journal of Law, Economics, and Organization · doi:10.1093/jleo/7.special_issue.24 · Cited by 6,046
Audit committee, board of director characteristics, and earnings management
Klein, A. (2002) · Journal of Accounting and Economics · doi:10.1016/s0165-4101(02)00059-9 · Cited by 4,622
Corporate governance, chief executive officer compensation, and firm performance
Core, J. E., Holthausen, R. W., & Larcker, D. F. (1999) · Journal of Financial Economics · doi:10.1016/s0304-405x(98)00058-0 · Cited by 4,335
Outside directors and CEO turnover
Weisbach, M. S. (1988) · Journal of Financial Economics · doi:10.1016/0304-405x(88)90053-0 · Cited by 4,234
DECHOW, P. M., SLOAN, R. G., & SWEENEY, A. P. (1996) · Contemporary Accounting Research · doi:10.1111/j.1911-3846.1996.tb00489.x · Cited by 4,065
(1997) · CFA Digest · doi:10.2469/dig.v27.n2.79 · Cited by 3,518
Managerial Incentive Problems: A Dynamic Perspective
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Cited by
The role of information and financial reporting in corporate governance and debt contracting
Armstrong, C. S., Guay, W. R., & Weber, J. P. (2010) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2010.10.001 · Cited by 1,494
Metadata
- Authors
- Laux, C., & Laux, V.
- Venue
- The Accounting Review
- Publisher
- American Accounting Association
- Published
- 2009-05-01
- Volume
- 84
- Issue
- 3
- Pages
- 869-891
- ISSN
- 0001-4826 (ISSN-L)
- 1558-7967
- OpenAlex
- W3123605543
- Cited by
- 322
- References
- 35
- FWCI
- 47.86
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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