{"title":"Cash versus Share Payouts in Relative Performance Plans","authors":"Oscar Timmermans","doi":"10.2308/tar-2022-0167","DOIUrl":"https://doi.org/10.2308/tar-2022-0167","url":null,"abstract":"<jats:title>ABSTRACT</jats:title> This study examines the risk taking properties associated with incentive plans that use relative performance evaluation, with a focus on the form of payout, whether in cash or shares. By analyzing determinants and consequences of payout form choice, I find that share-based plans offer risk-averse managers weaker incentives to pursue projects with idiosyncratic risk compared with cash plans. This occurs because share plans—unlike cash plans—expose managers to systematic performance trends, as payout values are linked to stock prices. Additionally, I document that the variation in risk taking incentives depends on expected relative performance and the strength of the incentives. Overall, this study’s findings suggest that commonly used share-based relative performance plans might not always motivate managers to pursue innovative projects with high idiosyncratic risk when projects with systematic risk are available. Data Availability: All data are available from the sources identified in the text. JEL Classifications: G30; J33; J41; M12; M41.","PeriodicalId":22240,"journal":{"name":"The Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141870383","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Non-GAAP EPS Denominator Choices","authors":"Kurt H. Gee, Thomas J. Linsmeier, Clay Partridge","doi":"10.2308/tar-2021-0554","DOIUrl":"https://doi.org/10.2308/tar-2021-0554","url":null,"abstract":"<jats:title>ABSTRACT</jats:title> We provide the first evidence after Regulation G on firms’ non-GAAP EPS denominator choices and whether they are informative or opportunistic. From 2013 to 2019, 17 percent of annual non-GAAP EPS numbers use denominators different from that of GAAP diluted EPS, which makes denominator adjustments among the most prevalent individual types of non-GAAP adjustments. For firms reporting GAAP and non-GAAP profits or GAAP losses and non-GAAP profits, we provide evidence consistent with denominator adjustments increasing non-GAAP EPS informativeness. Our evidence also suggests that opportunism in denominator choices is concentrated in firms reporting GAAP losses and non-GAAP profits and failing to adjust the denominator. Such nonadjustment is inconsistent with SEC requirements to report non-GAAP EPS “on a diluted basis” because the EPS denominator for a GAAP loss excludes dilutive claims. Although the SEC largely overlooks such firms, they are more likely, on average, to report non-GAAP EPS that analysts consider inflated. JEL Classifications: M40; M41; M48.","PeriodicalId":22240,"journal":{"name":"The Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141870385","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Thomas R. Kubick, John R. Robinson, Laura T. Starks
{"title":"CEO Incentives for Risk-Taking and Compensation Duration","authors":"Thomas R. Kubick, John R. Robinson, Laura T. Starks","doi":"10.2308/tar-2020-0784","DOIUrl":"https://doi.org/10.2308/tar-2020-0784","url":null,"abstract":"<jats:title>ABSTRACT</jats:title> When determining new equity grants, corporate boards face a tradeoff between the CEO’s incentives generated from the grant’s duration versus those arising from the convexity of the embedded equity risk. We hypothesize and find that boards lengthen the horizon of new compensation grants in the presence of greater pre-existing compensation sensitivity to stock return volatility (vega). In addition, consistent with our hypothesis, we find stronger results in the presence of greater left-tail risk. Further, employing two exogenous shocks to left-tail risk, we provide evidence consistent with our hypothesis that grant horizons are related to risk incentives. Our analysis of the interaction of these two incentive mechanisms provides new insights on compensation contracting. JEL Classifications: J33; M52.","PeriodicalId":22240,"journal":{"name":"The Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141870387","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Enrique A. Gomez, Frank Heflin, James R. Moon, James D. Warren
{"title":"Financial Analysis on Social Media and Disclosure Processing Costs: Evidence from Seeking Alpha","authors":"Enrique A. Gomez, Frank Heflin, James R. Moon, James D. Warren","doi":"10.2308/tar-2018-0659","DOIUrl":"https://doi.org/10.2308/tar-2018-0659","url":null,"abstract":"<jats:title>ABSTRACT</jats:title> Less-informed investors face greater costs of processing earnings news into actionable information. Our findings suggest financial analysis on social media reduces less-informed investors’ disclosure processing costs. We document an attenuated spike in earnings announcement (EA) information asymmetry for quarters containing more financial analysis on social media in the weeks prior to the EA. Cross-sectional evidence suggests this finding is stronger when coverage from traditional intermediaries is lower, for financial analyses written by more credible authors, and for financial analyses that are more likely relevant to evaluating the EA. Further evidence suggests retail trades, but not institutional trades, at EAs are significantly more profitable in quarters with greater financial analysis on social media, consistent with financial analysis on social media benefitting traders who are otherwise less-informed. Overall, our evidence suggests that financial analysis on social media plays an important role in aiding less-informed investors by helping them better process EA news. JEL Classifications: G14; M41.","PeriodicalId":22240,"journal":{"name":"The Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141870386","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Yinghua Li, Yupeng Lin, Xiaoqiao Wang, Shijie Yang
{"title":"Wall Street and Product Quality: The Duality of Analysts","authors":"Yinghua Li, Yupeng Lin, Xiaoqiao Wang, Shijie Yang","doi":"10.2308/tar-2022-0218","DOIUrl":"https://doi.org/10.2308/tar-2022-0218","url":null,"abstract":"\u0000 We investigate the role of financial analysts in product quality failures. Relying on information about product recalls, we first show that analyst coverage on average reduces product quality, particularly when managers face greater short-term pressure from institutional investors. However, after identifying a subgroup of analysts who raise questions on product-related issues in earnings conference calls, we find that coverage by these “product analysts” enhances rather than compromises product quality. Firms with greater product analyst coverage are also more likely to retire low-quality products. Additional analysis demonstrates that product analysts help safeguard product quality by further probing into product-related matters and issuing more timely recommendation downgrades after firms announce product deficiencies.\u0000 Data Availability: Data are available from the public sources cited in the text.\u0000 JEL Classifications: G24; G34; G38; L15.","PeriodicalId":22240,"journal":{"name":"The Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141028454","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Access to Financial Disclosure and Knowledge Spillover","authors":"Yen-Cheng Chang, Kevin Tseng, Tzu-Wen Yu","doi":"10.2308/tar-2023-0406","DOIUrl":"https://doi.org/10.2308/tar-2023-0406","url":null,"abstract":"<jats:title>ABSTRACT</jats:title> Access to firms’ innovation outputs determines the extent of knowledge spillover that poses risk to innovation appropriability. We provide plausibly causal evidence that processing costs of financial disclosures, which inform users of the economic value of innovation, play a key role in firms’ management of knowledge spillover. We exploit an exogenous, randomly assigned, and staggered policy shock by the SEC that reduces processing costs of mandatory financial disclosures. In response, firms reduce patenting rates, with the effect concentrated among firms in more competitive industries and with lower costs of capital. Firms also reduce their patent disclosure quality. Our results suggest firms rely more on trade secrecy as their innovation property protection mechanism. Lower processing costs of financial disclosures affect neither innovation inputs nor voluntary disclosure practices. Our results show that firms strategically manage access to their innovation outputs through financial disclosures, patent disclosures, and trade secrecy to curb knowledge spillover. JEL Classifications: D23; G30; O31; O32; O34.","PeriodicalId":22240,"journal":{"name":"The Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141870388","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Covers and Front Matter","authors":"","doi":"10.2308/0001-4826-99.3.i","DOIUrl":"https://doi.org/10.2308/0001-4826-99.3.i","url":null,"abstract":"","PeriodicalId":22240,"journal":{"name":"The Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141870390","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Urooj Khan, Vincent Yongzhao Lin, Zhiming Ma, Derrald Stice
{"title":"Strategic Alliances and Lending Relationships","authors":"Urooj Khan, Vincent Yongzhao Lin, Zhiming Ma, Derrald Stice","doi":"10.2308/tar-2021-0359","DOIUrl":"https://doi.org/10.2308/tar-2021-0359","url":null,"abstract":"<jats:title>ABSTRACT</jats:title> We study how proprietary information flows in strategic alliances facilitate banks’ information collection in private debt markets. We argue that lenders that have previously worked with a borrower’s alliance partners have an information advantage and show that firms entering a strategic alliance receive a lower interest spread on loans from banks that have previously lent to their strategic partners than loans from other banks. Cross-sectional tests on alliances’ economic importance and participants’ information environment support our hypothesis that the loan price effect is driven by reduced information asymmetry between borrowers and their partners’ relationship banks. Last, we find borrowers are more likely to obtain debt financing from alliance-related banks than from other banks. Overall, our findings are consistent with lenders that have previously worked with an alliance counterparty possessing debt contracting-relevant information about the soft nature of alliance value and the partners’ commitment to alliances. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G10; G21; G32.","PeriodicalId":22240,"journal":{"name":"The Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-04-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141870392","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号
