We examine whether management earnings forecast errors exhibit serial correlation and how analysts understand the serial correlation property of management forecast errors. Management forecast errors should not exhibit serial correlation if managers efficiently process information in prior...

This study examines the explicit use of relative performance evaluation (RPE) in executive compensation contracts and the selection of RPE peers. Using S&P 1500 firms' first proxy disclosures under the SEC's 2006 executive compensation disclosure rules, we find that about 25 percent of our...

We investigate the association between errors in management forecasts of subsequent year earnings and current year accruals. In an uncertain operating environment, managers' assessments of their firms' business prospects are imperfect. Since managers' imperfect business assessments influence...

Relative performance evaluation (RPE) compensates managers on their relative performance against a peer group. Since observing more peers' performance allows managers to better estimate the performance level required to achieve RPE targets, we conjecture that releasing earnings later than peers...

We investigate the association between errors in management forecasts of subsequent year earnings and current year accruals. In an uncertain operating environment, managers' assessments of their firms' business prospects are imperfect. Since managers' imperfect business assessments influence...