IDEAS home Printed from https://ideas.repec.org/a/taf/euract/v28y2019i2p371-393.html
   My bibliography  Save this article

CEO and Outside Director Equity Compensation: Substitutes or Complements for Management Earnings Forecasts?

Author

Listed:
  • Hyung Tae Kim
  • Byungjin Kwak
  • Jaywon Lee
  • Inho Suk

Abstract

This study examines how the equity compensation of chief executive officers (CEO) and that of outside directors affect management earnings forecasts (MFs) and the relationship between these two positions in terms of compensation. Our evidence reveals that CEO (director) equity compensation is positively associated with MF likelihood, frequency, and accuracy when director (CEO) equity compensation is not high. However, an increase in director (CEO) equity compensation is not effective in improving disclosure quality when the level of CEO (director) equity compensation is already high. These results suggest that the two incentive mechanisms act as substitutes when both are intensively used in the context of MF disclosure.

Suggested Citation

  • Hyung Tae Kim & Byungjin Kwak & Jaywon Lee & Inho Suk, 2019. "CEO and Outside Director Equity Compensation: Substitutes or Complements for Management Earnings Forecasts?," European Accounting Review, Taylor & Francis Journals, vol. 28(2), pages 371-393, March.
    • Handle: RePEc:taf:euract:v:28:y:2019:i:2:p:371-393
    DOI: 10.1080/09638180.2018.1473159
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09638180.2018.1473159
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09638180.2018.1473159?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tong Sheng & Bingquan Fang & Xiaoqian Lu & Xingheng Shi & Chaohai Shen & Xiaolan Zhou, 2022. "The Relationship between Corporate Social Responsibility, Global Investment, and Equity Incentives," Sustainability, MDPI, vol. 14(23), pages 1-27, December.
    2. Johannes Thesing & Patrick Velte, 2021. "Do fair value measurements affect accounting-based earnings quality? A literature review with a focus on corporate governance as moderator," Journal of Business Economics, Springer, vol. 91(7), pages 965-1004, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:euract:v:28:y:2019:i:2:p:371-393. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/REAR20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.