Duru, Augustine; Iyengar, Raghavan J.; Zampelli, Ernest M. - In: Journal of Corporate Finance 18 (2012) 5, pp. 1286-1305
This study examines the causal link between a firm's leverage decisions and the characteristics of its CEO bonus plans. Results from a simultaneous equations model strongly suggest that highly levered firms are less likely to use return on equity (ROE) or ROE-based accounting performance...