The relation between earnings-based measures in firm debt contracts and CEO pay sensitivity to earnings

被引：16

作者：

Rhodes, Adrienne ^{[1
]}

机构：

[1] Texas A&M Univ, Dept Accounting, 4353 TAMU, College Stn, TX 77843 USA

来源：

JOURNAL OF ACCOUNTING & ECONOMICS | 2016年 / 61卷 / 01期

关键词：

Executive compensation; Debt contracts; Covenants; Agency costs; EXECUTIVE-COMPENSATION; CORPORATE GOVERNANCE; PERFORMANCE; INFORMATION; INVESTMENT; INCENTIVES; AGENCY; COSTS;

D O I：

10.1016/j.jacceco.2015.11.002

中图分类号：

F8 [财政、金融];

学科分类号：

0202 ;

摘要：

I investigate how implicit incentives provided by earnings-based debt covenants affect the structure of CEO compensation contracts. This provides a new and unique view of how the CEO's incentives are shaped by not only his compensation contract but also debt contracts. I find when debt contracts contain an earnings-based covenant, the CEO's pay sensitivity to earnings is muted. Additionally, I find some evidence that pay sensitivity to earnings varies with earnings-based covenant slack. This study provides evidence consistent with shareholders rebalancing the CEO's earnings incentives in the presence of earnings-based covenants, thereby tilting incentives away from earnings performance. (C) 2015 Elsevier B.V. All rights reserved.

引用

页码：1 / 22

页数：22

共 17 条

[1] Performance Measures in Earnings-Based Financial Covenants in Debt Contracts
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[2] EARNINGS-BASED COMPENSATION CONTRACTS UNDER ASYMMETRIC INFORMATION
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[10] The association between non-financial performance measures in executive compensation contracts and earnings management
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