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Article: The Effect of Missing a Quarterly Earnings Benchmark on the CEO's Annual Bonus

TitleThe Effect of Missing a Quarterly Earnings Benchmark on the CEO's Annual Bonus
Authors
Matsunaga, SRPark, CW
KeywordsEarnings Management
Executive Compensation
Quarterly Earnings Benchmark
Issue Date2001
PublisherAmerican Accounting Association. The Journal's web site is located at http://aaapubs.aip.org/accr/
Citation
Accounting Review, 2001, v. 76 n. 3, p. 313-332 How to Cite?
AbstractWe 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 consensus analyst forecast or the earnings for the same quarter of the prior year, for at least two quarters during the year. However, we find that the relation between the bonus and the number of loss quarters is not significant. Our results suggest that CEO bonus payments provide CEOs with economic incentives to meet quarterly analyst earnings forecasts and earnings from the same quarter of the prior year.
Persistent Identifierhttp://hdl.handle.net/10722/177891
ISSN
0001-4826
2021 Impact Factor: 5.182
2020 SCImago Journal Rankings: 5.678
SSRN
262191
ISI Accession Number ID
WOS:000170013600002
References
References in Scopus

 

DC FieldValueLanguage
dc.contributor.authorMatsunaga, SRen_US
dc.contributor.authorPark, CWen_US
dc.date.accessioned2012-12-19T09:40:43Z-
dc.date.available2012-12-19T09:40:43Z-
dc.date.issued2001en_US
dc.identifier.citationAccounting Review, 2001, v. 76 n. 3, p. 313-332en_US
dc.identifier.issn0001-4826en_US
dc.identifier.urihttp://hdl.handle.net/10722/177891-
dc.description.abstractWe 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 consensus analyst forecast or the earnings for the same quarter of the prior year, for at least two quarters during the year. However, we find that the relation between the bonus and the number of loss quarters is not significant. Our results suggest that CEO bonus payments provide CEOs with economic incentives to meet quarterly analyst earnings forecasts and earnings from the same quarter of the prior year.en_US
dc.languageengen_US
dc.publisherAmerican Accounting Association. The Journal's web site is located at http://aaapubs.aip.org/accr/en_US
dc.relation.ispartofAccounting Reviewen_US
dc.subjectEarnings Managementen_US
dc.subjectExecutive Compensationen_US
dc.subjectQuarterly Earnings Benchmarken_US
dc.titleThe Effect of Missing a Quarterly Earnings Benchmark on the CEO's Annual Bonusen_US
dc.typeArticleen_US
dc.identifier.emailPark, CW: acparkc@hku.hken_US
dc.identifier.authorityPark, CW=rp01090en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.scopuseid_2-s2.0-0035598330en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0035598330&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume76en_US
dc.identifier.issue3en_US
dc.identifier.spage313en_US
dc.identifier.epage332en_US
dc.identifier.isiWOS:000170013600002-
dc.publisher.placeUnited Statesen_US
dc.identifier.ssrn262191-
dc.identifier.scopusauthoridMatsunaga, SR=7202964125en_US
dc.identifier.scopusauthoridPark, CW=37062708100en_US
dc.identifier.issnl0001-4826-

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