Skip to Main Content
 

Global Search Box

 
 
 
 

Files

File List


ucin1211908924.pdf (1003.98 KB)

ETD Abstract Container

Abstract Header

Earnings Management and Compensation: Do Compensation Committees Distinguish between Future Prospect Signaling and Opportunistic Accounting Choices?

HOLDER, ANTHONY DEWAYNE
http://rave.ohiolink.edu/etdc/view?acc_num=ucin1211908924

Abstract Details

2008, PhD, University of Cincinnati, Business Administration : Accounting.
Studies in the accounting literature suggest that managers conduct earnings management in an opportunistic (OEM) manner which enriches the CEO at the expense of shareholders. An alternative view is that earnings management signals the firms future prospects (FSEM) which is consistent with shareholder value maximization. The current study uses a firm specific mapping of accruals into future cash flows to differentiate between FSEM and OEM and then investigates whether the CEOs FSEM and OEM choices map into their compensation mechanism. Using a fifteen-year panel data set of CEOs in the largest, publicly traded U.S.companies, I document that, after controlling for CEO and firm specific determinants of compensation, FSEM (OEM) CEOs receive a compensation incentive premium (discount). Second, I document a positive (negative) association between CEO compensation and total long term cumulative shareholder returns for the FSEM (OEM) portfolios. Finally, consistent with signaling theory, I document that, after controlling for all other effects, the group of FSEM firms have significantly higher annual abnormal returns than the group of OEM firms. My results also suggest that the relation between the FSEM signal and risk adjusted returns depends on the length of the horizon considered in calculating risk adjusted returns.
Pradyot Sen, PhD (Committee Chair)
Davit Adut, PhD (Committee Member)
Christelle Viauroux, PhD (Committee Member)
155 p.
Accounting
Compensation; Earnings Management; Signal; Opportunistic

Recommended Citations

Citations

  • HOLDER, A. D. (2008). Earnings Management and Compensation: Do Compensation Committees Distinguish between Future Prospect Signaling and Opportunistic Accounting Choices? [Doctoral dissertation, University of Cincinnati]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=ucin1211908924

    APA Style (7th edition)

  • HOLDER, ANTHONY. Earnings Management and Compensation: Do Compensation Committees Distinguish between Future Prospect Signaling and Opportunistic Accounting Choices? 2008. University of Cincinnati, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=ucin1211908924.

    MLA Style (8th edition)

  • HOLDER, ANTHONY. "Earnings Management and Compensation: Do Compensation Committees Distinguish between Future Prospect Signaling and Opportunistic Accounting Choices?" Doctoral dissertation, University of Cincinnati, 2008. http://rave.ohiolink.edu/etdc/view?acc_num=ucin1211908924

    Chicago Manual of Style (17th edition)

ucin1211908924
1,011
© 2008, all rights reserved.
This open access ETD is published by University of Cincinnati and OhioLINK.