As firms evolve, the tasks required to generate firm value change, as does the ability of earnings to reflect changes in that value. To the extent earnings differentially captures managers’ effort toward desire tasks, contracting theory suggests its role in incentive pay should also change....

We examine the sensitivity of CEO compensation to pretax domestic and foreign incomes both before and after the Tax Cuts and Jobs Act of 2017 (TCJA). Our results show firms reward foreign over domestic earnings prior to the TCJA, when foreign income was tax advantaged relative to domestic...

We examine the relation between managerial incentives and disclosure. Specifically, we examine how contracts that explicitly evaluate managers relative to peer performance are associated with: (1) the transparency of mandatory disclosure; (2) the provision of voluntary disclosure; and (3) the...