CEO and Outside Director Equity Compensation: Substitutes or Complements for Management Earnings Forecasts?

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This study examines how the equity compensation of chief executive officers (CEO) and that of outside directors affect management earnings forecasts (MFs) and the relationship between these two positions in terms of compensation. Our evidence reveals that CEO (director) equity compensation is positively associated with MF likelihood, frequency, and accuracy when director (CEO) equity compensation is not high. However, an increase in director (CEO) equity compensation is not effective in improving disclosure quality when the level of CEO (director) equity compensation is already high. These results suggest that the two incentive mechanisms act as substitutes when both are intensively used in the context of MF disclosure.
Publisher
TAYLOR & FRANCIS LTD
Issue Date
2019-03
Language
English
Article Type
Article
Citation

EUROPEAN ACCOUNTING REVIEW, v.28, no.2, pp.371 - 393

ISSN
0963-8180
DOI
10.1080/09638180.2018.1473159
URI
http://hdl.handle.net/10203/260871
Appears in Collection
MT-Journal Papers(저널논문)
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