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|Title: ||CEO Compensation, Board Compensation and Earnings Management|
|Authors: ||Tang, Hui-Wen;Chen, Roger C. Y.|
|Keywords: ||Director Compensation, CEO Compensation, Earnings Management, Firm Performance, Incentive Awards|
|Issue Date: ||2019-04-08 12:10:29 (UTC+8)|
|Abstract: ||This study investigates the relationship between excess director compensation and CEO compensation, and the influence of CEO compensation due to excess director compensation on earnings management using ﬁrms covered by Standard and Poor’s ExecuComp database during 2007 and 2016. The results show that the characteristics of board of directors, CEOs, and company have a significant impact on the compensations of directors and CEOs. Excess director total compensation, i.e., those cannot be explained by the above characteristics, has a significant positive influence on CEOs’ cash compensation, incentive awards, total compensation and the exercise value of stock options. The parts of CEO’s cash compensation, incentive compensation, total compensation and the exercise value of stock options, which are affected by excess director compensation, have positive and significant effects on aggregate earnings management. This result indicates that the higher the CEO’s compensations, which are affected by excess director compensation, the more the CEO will increase profits by manipulating earnings. This study infers that the increases in these parts of CEO compensations are likely to be the result of earnings management based on common interests between the CEO and the board of directors, rather than a company’s complicated business or high risk, which requires highly-professional CEOs to work together with the board.|
|Relation: ||Proceedings of the 19th Asia-Pacific Conference on Global Business, Economics, Finance and Banking (AP18 Singapore Conference)|
|Appears in Collections:||[Graduate Institute & Department of Insurance Insurance] Proceeding|
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