CEO Pay Components and Aggressive Non-GAAP Earnings Disclosure

<jats:p> We examine the relation between CEO pay components and aggressive non-GAAP earnings disclosures using CEO pay components as proxies for managers’ short- versus long-term focus. Specifically, we explore the extent to which short-term bonus plan payouts and long-term incentive plan payouts are associated with: (1) Managers’ propensity to exclude expense items in excess of those excluded by equity analysts; and, (2) The magnitude of those incremental exclusions. We find that long-term incentive plan payouts are negatively associated with the likelihood and magnitude of aggressive non-GAAP exclusions. Our results are consistent with managers reporting non-GAAP information less aggressively when they are more focused on long-term, rather than short-term, value. /jats:p

Black, CEO Pay Components and Aggressive Non-GAAP Earnings Disclosure, 'Journal of Accounting, Auditing & Finance' (, ) pp. 0148558X2198990. Copyright © 2021. DOI: 10.1177/0148558x21989907. Users who receive access to an article through a repository are reminded that the article is protected by copyright and reuse is restricted to non-commercial and no derivative uses. Users may also download and save a local copy of an article accessed in an institutional repository for the user's personal reference. For permission to reuse an article, please follow our Process for Requesting Permission.

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Work Title CEO Pay Components and Aggressive Non-GAAP Earnings Disclosure
Access
Open Access
Creators
  1. Dirk E. Black
  2. Ervin L. Black
  3. Theodore E. Christensen
  4. Kurt H. Gee
License CC BY-NC-ND 4.0 (Attribution-NonCommercial-NoDerivatives)
Work Type Article
Publisher
  1. SAGE Publications
Publication Date February 15, 2021
Publisher Identifier (DOI)
  1. 10.1177/0148558x21989907
Source
  1. Journal of Accounting, Auditing & Finance
Deposited September 09, 2021

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  • Added Creator Ervin L. Black
  • Added Creator Theodore E. Christensen
  • Added Creator Kurt H. Gee
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