We examine whether the relation between earnings and bonuses changes after Sarbanes-Oxley. Theory predicts that, as the financial reporting system reduces the discretion allowed managers, firms will put more weight on earnings in compensation contracts to encourage effort. However, the increased...

Using data from FTSE 350 firms, we examine factors influencing explicit relative performance evaluation (RPE) conditions in performance-vested equity grants. We provide exploratory evidence on whether the use or characteristics of RPE are associated with efforts to improve incentives by removing...

Using data from FTSE 350 firms, we examine the factors influencing the explicit relative performance evaluation (RPE) conditions in performance-vested equity grants. We provide evidence on the use of RPE either to improve incentives by removing common risk or by linking greater vesting...

We examine changes in executive compensation that firms make in response to underwater options. Using a sample of firms with underwater options in 2000, we estimate that 81% of firms to take action to respond to underwater options. We examine explanations for firms' responses. Opponents argue...

We examine the role of accounting in CEO equity compensation design. For a sample of ExecuComp firms in 1995-2001, we find that financial reporting concerns are positively related to stock option use and total compensation, and negatively related to the use of restricted stock. We confirm our...

We examine whether repricing underwater stock options reduces both executive and overall employee turnover using a sample of firms that reprice stock options in 1998 and a sample of firms with underwater stock options that choose not to reprice. We find little evidence that repricing affects...

We examine repricing activity surrounding the FASB's 1998 announcement regarding accounting for repriced options. We find that repricing increases during, and decreases after, the 12-day window between the announcement and proposed effective dates, consistent with firms timing repricings to...

In this study, we examine factors that explain firms' decisions to reprice stock options. Comparing a sample of firms that reprice executive stock options in 1998 to a control sample of firms with out-of-the-money options in 1998 that choose not to reprice, we find that young, high technology...

We examine stock option repricing activity that coincided with the December 4, 1998 FASB announcement regarding accounting for repriced employee stock options. The accounting treatment requires recognition of compensation expense in future periods if there is an increase in stock price after...

We use an unanticipated court ruling in a lawsuit against Citigroup claiming corporate waste related to CEO pay to analyze court intervention as an alternative governance mechanism in cases of excess pay. We find a negative relation between announcement returns and excess pay, consistent with...