Performance-based pay is an important instrument to align the interests of managers with the interests of shareholders. However, recent evidence suggests that high-powered incentives also provide managers with incentives to manipulate the firm's reported earnings. The previous literature has...

“Tell me David, is it better to have a great strategy poorly executed, or a so-so strategy really well executed?” The age-old question suggests there is a fundamental tradeoff between strategy and execution. The tone in which it is asked typically flags that the questioner already knows the...