We examine the effect of competitive shocks on executive compensation in the pharmaceutical sector. When a pharmaceutical firm receives a breakthrough therapy designation (BTD), its rivals respond by increasing option-based compensation for CEOs and other executives. The rivals also escalate...

This study examines the associations between the Chief Financial Officer's (CFOs) short- and long-term compensation and discretionary current and non-current accruals. The CFO's cash bonus is used as a measure of short-term incentives and shares plus options is used as a measure of long-term...