财务、会计Seminar第一百四十二期讲座

演讲题目: The Asymmetric  Information Content in Unexpected Bonus

Compensation

 

演讲者Zhonglan  Dai,   Associate Professor of Accounting, Jindal School of  

 

Management, University of Texas at  Dallas

 

 

演讲时间:20161216日(周五)上午10:001130

 

 

演讲地点嘉庚二203

 

 

参加者:对会计、财务研究有兴趣的师生

 

 

ABSTRACT

Between two common forms of  incentive compensation: cash bonus and equity grants, the boards in less risky  and more certain firms would prefer bonus when they can monitor and assess their  CEOs better. In the meantime, prior literature documents strong evidence that  boards have tendency to shield their CEOs (especially their bonus) from poor  performance. This, in turn, makes the unexpected bonus reduction informative for  those firms. We study the information content embedded in the bonus  compensation, especially unexpected bonus reduction, by examining its predicting  power on a firm’s future. Controlling for all known factors, we find that the  unexpected bonus reduction (not unexpected bonus raise) predicts both future  operating performance and forced CEO turnovers. We also find that shareholders  respond to the unexpected bonus reduction when the relevant compensation  information becomes public. Together, our results suggest that the unexpected  bonus reduction decision contains such rich private information that it helps  predict future operating performance and CEO  firings.