The Effect of Missing a Quarterly Earnings Benchmark on the CEO's Annual Bonus

By Steven R. Matsunaga, Chul W. Park. 2001

504 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/a9d0033f6731af0944594366e77c126ac2becd3a

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Citations in the corpus

Are Investors Misled by 'Pro Forma' Earnings? (2002, unknown): “Managers have incentives to avoid reporting earnings declines, losses, and disappointments (Barth, Elliott and Finn 1999; Burgstahler and Dichev 1997; Degeorge, Patel and Zeckhauser 1999; Matsunaga and Park, 2001; Skinner 1997; Skinner and Sloan 1999).”
Perspectives on Recent Capital Market Research (2002, background): “The oldest is an eamings-only approach—Miller and Modigliani (1966) characterize value as the present value of permanent future eamings.”
Audit Quality and the Trade-Off between Accretive Stock Repurchases and Accrual-Based Earnings Management (2012, background): “When EPS benchmarks are missed, firms suffer severe stock price losses (Skinner and Sloan 2002), managerial compensation declines (Matsunaga and Park 2001), and managers perceive that their reputations are at risk (Graham et al. 2005).”
Impact of firm performance expectations on CEO turnover and replacement decisions (2003, unknown): “DeFond and Park (1999) find that the frequency of CEO turnover is greater in highly competitive industries than in less competitive industries.”
Bias in the tone of forward‐looking narratives (2010, background): “A lower profit can lead to a decline in managerial remuneration (Matsunaga and Park, 2001), reduced job security (Puffer and Weintrop, 1991) and a loss in managerial disclosure reputation (Matsumoto, 2002).”
Does Stock Liquidity Enhance or Impede Firm Innovation (2013, unknown): “(Maug (1998), Edmans (2009)) on collection and/or trading of private information, we use an alternative liquidity measure, the PIN (probability of informed trading) measure of Easley, Kiefer, and O'Hara (1997), to check the robustness of our baseline results.”
CEO Optimism and Incentive Compensation (2014, unknown): “Two salient benchmarks are the EPS that were realized during the prior year and the analyst consensus forecast for the firm's earnings (see, e.g., Graham, Harvey, and Rajgopal, 2005; Matsunaga and Park, 2001).”
Internal Governance and Real Earnings Management (2016, background): “See, for examples, DeFond and Park (1997) on the pressure related to job security, Matsunaga and Park (2001) on the pressure related to meeting earnings benchmarks, and Bartov, Givoly, and Hayn (2002) and Kasznik and McNichols (2002) on the capital market pressure to deliver short-term performance.”
Accounting Discretion, Corporate Governance, and Firm Performance* (2008, unknown): “Matsunaga and Park (2001) find that missing strategic earnings benchmarks such as analyst forecasts appears to reduce CEO bonuses.”
Trading incentives to meet the analyst forecast (2006, background): “As evidence of the direct effect, Matsunaga and Park (2001) find that managers’ cash bonuses increase with meeting analyst forecasts.”
Earnings Management Using Classification Shifting: an Examination of Core Earnings and Special Items (2006, unknown): “In addition to capital market incentives, managers might wish to meet the analyst forecast in order to maximize their cash bonus (Matsunaga and Park 2001), sell their shares (Richardson et al. 2004; McVay et al. 2006), or maximize their compensation in general, as compensation committees tend to…”