Identifies three approaches to controlling the agent‐principal conflict for CEOs (market discipline, compensation structure and monitoring mechanisms) and reviews previous relevant research. Develops a mathematical model of the relationship between pay‐for‐performance sensitivity and...

Classifies previous research on the links between earnings management and managerial opportunism into studies of the links between earnings‐based compensation schemes and opportunistic, short‐term earnings management; and earnings management around CEO changes. Suggests some reasons why the...

Looks at previous research on the differences between multinational corporations (MNCs) and domestic corporations (DCs) and the theories underlying them, relating the ideas to optimal compensation packages for managers. Examines a sample of 724 MNCs and US domestic firms to compare the degree of...

Outlines previous research on the links between board composition, firm performance and chief executive officer (CEO) compensation, and presents a study of CEO pay‐performance sensitivity, board independence and performance in the US banking industry. Explains the methodology and presents the...

Relates previous research on the importance of age in decision‐making to Fama and Jensen’s (1983) ideas on decision management, develops hypotheses on the age of managers and the use of stock‐based compensation in companies with long time horizons (i.e. growth companies) and tests them on...

Reviews previous research on the timing of employee stock option exercise decisions and share price performance before and after insider trading. Analyses the 1992‐1993 exercise behaviour of top executives at 65 large US firms using the Black‐Scholes (1973) value (less anticipated dividends)...

Outlines previous research on the role of executive compensation contracts in reducing conflicts of interest between ownership and control; and develops hypotheses on the effects of chief executive officer stock options and share ownership on subsequent firm performance. Suggests that since...

Reviews previous research on agency theory, the use of long‐term performance plans to align the interests of managers and shareholders, and the effect of these plans on firm performance. Uses data from a sample of 29 US companies adopting/changing long‐term performance plans and a matched...

Presents a study of the importance of multinationality in predicting firm valuation and profitability using Ohlson’s (1988, 1991) valuation model as a basis for model development. Tests these models on 1987‐1992 US data and compares them with predictions based on current return on equity....

Outlines the role of the conservatism inherent in generally accepted accounting principles in Ohlson’s (1995) and Feltham and Ohlson’s (1995) valuation models and compares it with other research findings. Identifies potential sources of conservatism (e.g. expensing advertising costs,...