Livne, Gilad; Markarian, Garen; Milne, Alistair - In: Journal of Corporate Finance 17 (2011) 4, pp. 1096-1115
This paper examines the role of certain fair value accounting (FVA) outcomes in compensation of US bank CEOs. The use of FVA in compensation invites an agency cost--the clawback problem--if cash compensation is based on unrealized profits that may reverse in the future. At the same time FVA may...