Investment opportunities and the structure of executive compensation
Article Abstract:
Smith and Watts' (1992) contracting paradigm of the firm is extended to examine cross-sectional links between investment opportunities and the impact of performance measures on executive compensation. The study tests the hypotheses that the links between pay and performance are greater in companies with greater investment opportunities, and that market-based performance indicators are used more often than accounting-based indicators to determine incentive payments when investment opportunities account for a substantial portion of the company's value. The findings support these hypotheses.
Publication Name: The Journal of Accounting and Economics
Subject: Business
ISSN: 0165-4101
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
Accounting earnings and executive compensation: the role of earnings persistence
Article Abstract:
CEO cash compensation data from proxy statements for 713 publicly traded US firms were analyzed to examine the relation between compensation and corporate earnings. It was found that CEO cash compensation is sensitive to earnings and that this sensitivity varies with earnings persistence and is greater in situations where in the executive is near retirement. Results also suggested that earnings persistence is not relevant to stock-based compensation components.
Publication Name: The Journal of Accounting and Economics
Subject: Business
ISSN: 0165-4101
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
Estimates of economic rates of return for the U.S. pharmaceutical industry, 1976-1987
Article Abstract:
A comprehensive approach is presented that is intended to facilitate the estimation of an industry's economic rates of return using accounting data. The methodology is illustrated through an examination of the profitability of the US pharmaceutical industry during the period 1976-1987. Findings show that returns in the pharmaceutical industry are higher than returns for comparable industrial companies by 2.1% to 3.8%.
Publication Name: Journal of Accounting and Public Policy
Subject: Business
ISSN: 0278-4254
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Venture capitalists, unquoted equity investment appraisal and the role of accounting information
- Abstracts: Keeping a corporate clout. The shakeout continues
- Abstracts: The corporate skyline. Still on the drawing board
- Abstracts: Rivals lift Abbey. Why British home loans are such a bad deal. Abbey ahead - how long?
- Abstracts: When the honeymoon ends. Wealth of advice. Serious players spot serious potential