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 focused primarily on Chief Executive Officers, but managers further down in the …

-GAAP financial disclosures. Controlling for compensation to stock price sensitivity, we find that managers with higher compensation … disclosures. In addition, higher-vega managers are found to be associated with more frequent and less opportunistic non … arrangements can encourage managers to make more, higher-quality voluntary non-GAAP disclosures …

We examine how clawback provisions and board monitoring affect managers' use of discretion to achieve earnings targets … amount of earnings management activity. This null result arises because, while clawbacks do curb the extent to which managers … managers' use of discretion when making operational decisions (real earnings management). In contrast, strong board monitoring …