Is Accounting Information Quality Priced in Managerial Labor Market?

Yonghong Jia, Xinghua Gao, Xiumin Martin
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Abstract

We study whether accounting information quality (AIQ) is priced in the executive labor market. Focusing on externally hired CEO compensation at their initial appointment, we find a 7.38% pay premium for a one-standard deviation decline in AIQ measured in the years preceding the appointment. This result is robust to the inclusion of a comprehensive set of variables reflecting the characteristics of compensation contracts, executives, firms, industries, and states, and three alternative measures of AIQ. Thus our findings are unlikely driven by omitted correlated variables or measurement errors of AIQ. Additional evidence suggests job security concern and accounting failure risk might be the channels to explain the pricing premium for poor AIQ. We also find firms with less effective boards have lower sensitivity of compensation to AIQ, suggesting that private benefits might offset pay premium required by a CEO for low AIQ. Finally, we show the pay premium-AIQ relation is stronger for young CEOs and for CEOs with outside employment restriction, lending further support to the job security mechanism.
会计信息质量是否在管理劳动力市场中定价?
我们研究会计信息质量(AIQ)是否在高管劳动力市场定价。专注于外部聘用的首席执行官最初任命时的薪酬,我们发现,在任命前几年衡量的AIQ下降一个标准差,其薪酬溢价为7.38%。该结果对于包含反映薪酬合同、高管、公司、行业和州的特征的综合变量集以及AIQ的三种替代度量是稳健的。因此,我们的发现不太可能是由遗漏的相关变量或AIQ的测量误差驱动的。其他证据表明,对工作安全的担忧和会计失败风险可能是解释低AIQ定价溢价的渠道。我们还发现,董事会效率较低的公司对AIQ的薪酬敏感度较低,这表明私人福利可能会抵消CEO因低AIQ而需要的薪酬溢价。最后,我们发现薪酬溢价- aiq关系在年轻ceo和受外部就业限制的ceo中更强,进一步支持了就业保障机制。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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