The Effect of Missing a Quarterly Earnings Benchmark on the CEO's Annual Bonus
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A frame that forgets how it found something cannot be audited. These are the routes that admitted this work.
No Canadian affiliation. An affiliation-only frame — the usual design — would never have seen this work. It is one of the works that make the case for inverting the frame.
Machine scores (provisional)
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
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- Teacher spread
- 0.216 · how far apart the two teachers sit on this one work
- Validation status
score_only:v0-immature-baseline· verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it
Abstract
We investigate the effects of missing quarterly earnings benchmarks on the CEO's annual bonus. After controlling for the general pay-for-performance relation, we find a significant incremental adverse effect on CEO annual cash bonuses when the firm's quarterly earnings fall short of the consensus analyst forecast or the earnings for the same quarter of the prior year, for at least two quarters during the year. However, we find that the relation between the bonus and the number of loss quarters is not significant. Our results suggest that CEO bonus payments provide CEOs with economic incentives to meet quarterly analyst earnings forecasts and earnings from the same quarter of the prior year.
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The record
- Venue
- The Accounting Review
- Topic
- Auditing, Earnings Management, Governance
- Field
- Business, Management and Accounting
- Canadian institutions
- —
- Funders
- —
- Keywords
- EarningsIncentiveQuarter (Canadian coin)EconomicsCashPaymentBenchmark (surveying)Demographic economicsBusinessAccountingFinance
- Has abstract in OpenAlex
- yes