Estimating the sensitivity of CEO compensation to gross versus net accounting performance

IF 3.2 3区管理学 Q1 BUSINESS, FINANCE

Contemporary Accounting Research Pub Date : 2023-11-09 DOI:10.1111/1911-3846.12917

Dirk E. Black, Shane S. Dikolli, Christian Hofmann, Thomas Pfeiffer

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Abstract

In empirically estimating the relation between CEO compensation and accounting-based firm and peer performance, researchers often define the performance variables net of CEO compensation expense. We analytically show that a researcher's use of CEO compensation as a regression's dependent variable and as an expense in defining a regression's independent variables representing accounting-based firm and peer performance will bias the researcher's pay-for-performance and relative performance evaluation (RPE) regression coefficients. In a panel estimation of CEO compensation, we document an attenuation bias in the coefficients on net firm and net peer performance. This evidence may partially explain inferences of weak CEO incentives and limited usage of RPE in prior work. Our results imply that in CEO compensation regressions, a researcher can remove biases in inferring CEO incentives and RPE usage by using gross rather than net accounting performance variables—that is, by adding back CEO compensation expense to net accounting measures.

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估算首席执行官薪酬对会计业绩毛额和净额的敏感度

在对首席执行官薪酬与基于会计核算的公司及同行绩效之间的关系进行实证估算时，研究人员通常会在扣除首席执行官薪酬支出后再定义绩效变量。我们的分析表明，如果研究人员将首席执行官薪酬作为回归的因变量，并在定义回归的自变量（代表基于会计的公司和同行绩效）时将其作为一项支出，那么研究人员的绩效薪酬和相对绩效评估（RPE）回归系数就会出现偏差。在对首席执行官薪酬的面板估计中，我们记录了公司净业绩和同行净业绩系数的衰减偏差。这一证据可以部分解释之前研究中 CEO 激励机制薄弱和 RPE 使用有限的推论。我们的研究结果表明，在首席执行官薪酬回归中，研究人员可以通过使用总会计业绩变量而非净会计业绩变量--即在净会计指标中加入首席执行官薪酬支出--来消除在推断首席执行官激励机制和 RPE 使用方面的偏差。

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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来源期刊

Contemporary Accounting Research BUSINESS, FINANCE-

CiteScore

6.20

自引率

11.10%

发文量

期刊介绍： Contemporary Accounting Research (CAR) is the premiere research journal of the Canadian Academic Accounting Association, which publishes leading- edge research that contributes to our understanding of all aspects of accounting"s role within organizations, markets or society. Canadian based, increasingly global in scope, CAR seeks to reflect the geographical and intellectual diversity in accounting research. To accomplish this, CAR will continue to publish in its traditional areas of excellence, while seeking to more fully represent other research streams in its pages, so as to continue and expand its tradition of excellence.