Executive Compensation and Earnings Persistence

Ashley, Allan; Yang, Simon

doi:10.1023/b:busi.0000025031.81884.ed

Cited by 22 publications

(13 citation statements)

References 27 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Although the general issue of the ethics of managerial compensation has been discussed widely in the academic literature (for example, see Ashley and Yang, 2004;Matsumura and Shin, 2005;Nichols and Subramanian, 2001;Perel, 2003;Rodgers and Gago, 2003), there has been meager academic attention paid to the specific topic of the ethics of stock options in relation to the subject of executive pay (see Angel and McCabe, 2002;Arya and Sun, 2004). The intention of this paper is to shed substantial light on what this issue is really all about and to determine and comprehend the deeper ethical considerations.…”

Section: Introductionmentioning

confidence: 99%

The Ethics of Managerial Compensation: The Case of Executive Stock Options

Angel

McCabe

2007

J Bus Ethics

View full text Add to dashboard Cite

show abstract

Section: Introductionmentioning

confidence: 99%

The Ethics of Managerial Compensation: The Case of Executive Stock Options

Angel

McCabe

2007

J Bus Ethics

View full text Add to dashboard Cite

show abstract

“…Earnings persistence is one of the most important qualitative properties of accounting profit, which implies the stability and durability of this profit (Healy, Serafeim, Srinivasan, & Yu, 2014). The earning acquired from ongoing business operations are more stable relative to reported items in the financial statements (Ashley & Yang, 2004;Bahri, E, & Poniwati, 2017). Accruals are other examples because they are taken into account somehow personally, which leads to the low stability of these items.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Earnings Persistence on the Operating Cash Flows with Emphasis on Financial Constraints

Ilkhechi¹,

Khatibi²

2020

Int. j. bus. adm. stud

View full text Add to dashboard Cite

The purpose of this study is to investigate the effect of earnings stability on operating cash flows with emphasis on financial constraints. Evidence suggests that earnings stability has a positive and significant effect on operating cash flows. Financial constraints have a negative and significant effect on operating cash flows, and financial constraints do not have a significant interactive effect on the relationship between profit stability and operating cash flows. To measure operating cash flow, the cash flow from operating activity obtained through the cash flow statement is obtained by dividing the company's total assets. From 2012 to 2016 that a total of 121 companies active in various industries have formed the research sample. The present research method is descriptive-correlational in terms of applied purpose and post-event in terms of the data collection method. A multivariate regression method has been used to test the research hypotheses. The independent variable in this study is profit stability, and the dependent variable is operating cash flow and financial constraint as a moderating variable. The result is also supported by stakeholder theory. In general, the study adds to the literature by emphasizing the importance of earnings stability in shaping operating cash flow and its financial constraints.

show abstract

“…Governing boards utilize executive compensation contracts in an attempt to align executive actions with corporate goals (Ashley and Yang, 2004). The exploration of the relationship between executive and leadership shareholding, compensation, and analysts' forecasts in the world's largest emerging market is significant for the following reasons.…”

Section: Introductionmentioning

confidence: 99%

“…Despite the conflicting views on the effects of managerial ownership, we know relatively little regarding the association between Chinese firm executive/leadership ownership and analyst forecasts and forecast dispersion (see Han et al, 2014). In addition to executive ownership, studies on the structure of executive compensation such as Ashley and Yang (2004) reveal that the effect of high earnings persistence results in firms that focus more heavily on cash compensation (salary and bonus) rather than on equity compensation (stock options, etc.) due to earnings targeting.…”

Section: Introductionmentioning

confidence: 99%

Executive shareholding, compensation, and analyst forecast of Chinese firms

Huang

Boateng

2016

Applied Economics

View full text Add to dashboard Cite

We examine the impact of executive and leadership shareholding and cash compensation on analyst forecast error and dispersion as proxies for information asymmetry. We find that firms pay higher compensation (or excess compensation) to executives and directors are associated with higher information asymmetry. The positive association is stronger where executives' and directors' shareholdings are higher. Shareholding appears to facilitate managerial entrenchment and gives highly paid executives/leadership stronger structural power which adversely affects information disclosure leading to larger forecast error and dispersion. These results are robust to different measures of compensation and alternative models controlling for the predictability of firm level earnings. Our findings indicate that executive/director shareholding and compensation do not provide sufficient incentives for information disclosure by Chinese firms.

show abstract

Executive Compensation and Earnings Persistence

Cited by 22 publications

References 27 publications

The Ethics of Managerial Compensation: The Case of Executive Stock Options

The Ethics of Managerial Compensation: The Case of Executive Stock Options

The Impact of Earnings Persistence on the Operating Cash Flows with Emphasis on Financial Constraints

Executive shareholding, compensation, and analyst forecast of Chinese firms

Contact Info

Product

Resources

About