This study investigates the effect of market inefficiency on the value relevance of earnings. Many prior studies challenge the efficiency of the stock market, an assumption the value relevance studies build on. With evidence of market inefficiency, it becomes important to understand how the...

We examine the importance of bonus contract characteristics, specifically with respect to the relation between EPS-based bonuses and share repurchases. We find that managers are more (less) likely to repurchase shares and spend more (less) on repurchases when as-if EPS just misses (exceeds) the...

We examine boards of directors' subjective adjustments to objective performance measures in executive incentive contracts. Using a unique hand-collected sample of adjusted earnings per share measures used to determine executives' annual bonuses, we provide large-sample evidence that subjective...

This study investigates whether firms revise executive bonus compensation targets based on past performance. Studies in this area suffer from a lack of detailed information related to executive performance targets. Using mandatory disclosures of executive compensation information under the U.S....

Prior studies often examine the association between performance and various measures of incentive strength. We argue that target difficulty is another important but often overlooked driver of managerial performance. Using data on earnings targets in annual bonus plans, we construct and validate...

We introduce a new relaxation framework for nonconvex quadratically constrained quadratic programs (QCQPs). In contrast to existing relaxations based on semidefinite programming (SDP), our relaxations incorporate features of both SDP and second order cone programming (SOCP) and, as a result,...