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Firms trade-off CFOs' fiduciary duties against their decision-making duties when designing CFO bonus plans. Decreasing bonus incentives tied to financial measures benefits CFOs' fiduciary responsibilities at the expense of motivating their decision making duties. As prior research indicates that...
Persistent link: https://www.econbiz.de/10012938373
We study whether relative power in the CEO-CFO relationship influences CEO compensation. To operationalize relative power of a CEO over a CFO, we define CFO co-option as the appointment of a CFO after a CEO assumes office. We find that CFO co-option is associated with a CEO pay premium of about...
Persistent link: https://www.econbiz.de/10012903005
Recent regulation and legislation, along with the growing influence of compensation consultants and proxy advisors, have led to an increase in performance-contingent awards. A majority of these awards contain performance conditions tied explicitly to accounting measures. Both the structure of...
Persistent link: https://www.econbiz.de/10013031959
Using data that includes specific contractual details of Relative Performance Evaluation (RPE) contracts granted to executives for 1,833 firms for the period 1998 to 2012, we develop new methods to characterize RPE awards and measure their value and incentive properties. The frequency in the use...
Persistent link: https://www.econbiz.de/10013059189
Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts hinges on two characteristics: noise and distortion. These criteria, though, will only be useful in practice as long as the noise and distortion of a performance measure can be...
Persistent link: https://www.econbiz.de/10011376645
process of a firm. Using managerial power theory (Bebchuk and Fried, 2003) and the theory of power and self-focus (Pitesa and …
Persistent link: https://www.econbiz.de/10012974079
We examine the sorting role of broad-based equity pay using detailed employee-level data. We propose trust in management as an important and beneficial characteristic over which equity pay sorts employees, as such pay typically leaves employees with concentrated positions in employer stock and...
Persistent link: https://www.econbiz.de/10012851565
This study provides evidence regarding the importance boards of directors place on effective communication with the investor community by examining whether CEO and CFO compensation are related to the quality of the firm's financial disclosures. Using an index derived from analyst forecast...
Persistent link: https://www.econbiz.de/10013063619
Persistent link: https://www.econbiz.de/10012506071