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| Author: | Baber, W. |
| Title: | Accounting earnings and executive compensation: the role of earnings persistence |
| Journal: | Journal of Accounting & Economics
1998 : MAY, VOL. 25:2, p. 169-194 |
| Index terms: | ACCOUNTING EARNINGS EXECUTIVES |
| Language: | eng |
| Abstract: | A cross-sectional analysis of cash compensation paid to CEO's of 713 US firms reveals that the sensitivity of compensation to earnings varies directly with earnings persistence. Additional analysis indicates that this sensitivity is greater for cases where executives are approaching retirement. Such evidence suggests the use of earnings persistence to counterbalance adverse consequences of earnings-based contracting with managers who face finite decision horizons. |
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