This study investigates whether compensation committees seek to prevent opportunistic reductions in Ramp;D expenditures. I hypothesize that changes in Ramp;D spending are more strongly positively associated with changes in CEO compensation in two situations: (1) when the CEO approaches...

In this paper, we investigate the reputational penalties to managers of firms announcing earnings restatements. More specifically, we examine management turnover and the subsequent employment of displaced managers at firms announcing earnings restatements during 1997 or 1998. In contrast to...

This paper examines whether firms structure their convertible bond transactions to manage diluted EPS. We find that the likelihood of firms issuing contingent convertible bonds (COCOs), which are often excluded from diluted EPS calculations under SFAS 128, is significantly associated with the...

This paper develops an agency model in which stock-based compensation is a double-edged sword, inducing managers to exert productive effort but also inducing managers to divert valuable firm resources to misrepresent performance. We examine how the potential for manipulation affects the...

We investigate whether corporate managers' stock repurchase decisions are affected by their incentives to manage diluted earning-per-share (EPS). We find that managers increase the level of their firms' stock repurchases when: (1) the dilutive effect of outstanding employee stock options (ESOs)...

The objective of this study is to understand the managerial incentives that could influence Singapore-listed firm?s decision to take discretionary accruals, and to classify gains and losses as normal operating or extraordinary items, during the period 1997 to 1999. Both cross-sectional and...

We investigate the effects of missing quarterly earnings benchmarks on the CEO's annual bonus. After controlling for the general pay-for-performance relation, we find a significant incremental adverse effect on CEO annual cash bonuses when the firm's quarterly earnings fall short of the...

Managers? systematic influence on accounting policy is well documented in the earnings management literature. Recent studies in the quot;management of informationquot; line of research suggest that such influence is exhibited in financial reporting more generally, including supplemental...

Prior studies that examine the effect of managerial incentives on investment or misreporting decisions typically hold firm characteristics constant and focus on a particular managerial incentive. However, managers' responses to different types of incentives likely depend on firm characteristics...

This study examines whether boards discipline CEOs and CFOs more severely for accounting restatements after passage of the Sarbanes-Oxley Act (SOX). The disciplinary actions I focus on are job termination and reductions in bonus payouts. Boards have incentive to take the highly visible action of...