Equity incentives, earnings management and corporate governance: Empirical evidence using UK panel data
| العنوان: | Equity incentives, earnings management and corporate governance: Empirical evidence using UK panel data |
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| المؤلفون: | Mohamed A. Shabeeb Ali, Hazem Ramadan Ismael, Ahmed Hassan Ahmed |
| المصدر: | Corporate Ownership and Control. 17:104-123 |
| بيانات النشر: | Virtus Interpress, 2020. |
| سنة النشر: | 2020 |
| مصطلحات موضوعية: | Executive Compensation, 050208 finance, ComputingMilieux_THECOMPUTINGPROFESSION, business.industry, Agency Theory, Corporate governance, 05 social sciences, Discretionary Accruals, Equity incentives, Accounting, General Business, Management and Accounting, GeneralLiterature_MISCELLANEOUS, Corporate Governance, Earnings management, 0502 economics and business, Empirical evidence, business, 050203 business & management, Managerial Power Theory, Panel data |
| الوصف: | Using a UK panel data set drawn from 1675 Chief Executive Officer (CEO) year observations and 1540 Chief Financial Officer (CFO) year observations, we examine the relationship between CEO and CFO equity incentives and earnings management. In addition, we examine the moderation effect of corporate governance mechanisms on the relationship between executives’ equity incentives and earnings management. We use multivariate regression models to test our hypotheses. We find that CEO equity incentives are related to higher absolute and income increasing earnings management. These results support the managerial power theory argument that CEOs exploit equity-linked compensation to obtain more personal benefits without causing public anger. Contrary to CEO equity incentives, we could not find any significant relationship between CFO equity incentives and any of the earnings management proxies. In addition, we find that corporate governance quality (measured by individual mechanisms and overall index) has no effect on the relationship between executives’ equity incentives and earnings management. This result indicates that whereas some corporate governance mechanisms can reduce earnings management in general, they do not affect wealth driven incentives to manipulate accruals. In total, results question the effectiveness of the corporate governance system in mitigating opportunistic behavior motivated by executives’ compensation structures |
| وصف الملف: | application/pdf |
| تدمد: | 1810-3057 1727-9232 |
| DOI: | 10.22495/cocv17i2art10 |
| URL الوصول: | https://explore.openaire.eu/search/publication?articleId=doi_dedup___::823fea7a0791c4e83eb57edaaafecd48 https://doi.org/10.22495/cocv17i2art10 |
| Rights: | OPEN |
| رقم الانضمام: | edsair.doi.dedup.....823fea7a0791c4e83eb57edaaafecd48 |
| قاعدة البيانات: | OpenAIRE |
| تدمد: | 18103057 17279232 |
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| DOI: | 10.22495/cocv17i2art10 |