Access the full text.
Sign up today, get DeepDyve free for 14 days.
Loading next page...
/lp/wiley/an-analysis-of-the-relation-between-the-stewardship-and-valuation-N0fzjOmCIr
References (44)
-
Bushman Bushman, Indjejikian Indjejikian (1993)
Accounting Income, Stock Price, and Managerial CompensationJournal of Accounting and Economics, 16
-
White White (1980)
A Heteroscedasticity‐Consistent Covarience Matrix Estimator and a Direct Test of HeteroscedasticityEconometrica, 48
-
Datar Datar, Kulp Kulp, Lambert Lambert (2001)
Balancing Performance MeasuresJournal of Accounting Research, 39
-
Beaver Beaver, Lambert Lambert, Morse Morse (1980)
The Information Content of Security PricesJournal of Accounting and Economics, 2
-
Ittner Ittner, Larcker Larcker, Rajan Rajan (1997)
The Choice of Performance Measures in Annual Bonus ContractsThe Accounting Review, 72
-
Ohlson Ohlson (1999b)
On Transitory EarningsReview of Accounting Studies, 4
-
Lambert Lambert, Larcker Larcker (1987)
An Analysis of the Use of Accounting and Market Measures of Performance in Executive Compensation ContractsJournal of Accounting Research, 25
-
Smith Smith, Watts Watts (1992)
The Investment Opportunity Set and Corporate Financing, Dividend and Compensation PoliciesJournal of Financial Economics, 32
-
Bushman Bushman, Indjejikian Indjejikian, Penno Penno (2000)
Private Predecision Information, Performance Measure Congruity and the Value of DelegationContemporary Accounting Research, 17
-
Baber Baber, Kang Kang, Kumar Kumar (1998)
Accounting Earnings and Executive Compensation: The Role of Earnings PersistenceJournal of Accounting and Economics, 25
-
Reichelstein Reichelstein (1997)
Investment Decisions and Managerial Performance EvaluationReview of Accounting Studies, 2
-
Ahmed Ahmed (1994)
Accounting Earnings and Future Economic Rents: An Empirical AnalysisJournal of Accounting and Economics, 17
-
Holthausen Holthausen, Watts Watts (2001)
The Relevance of the Value‐Relevance Literature for Financial Accounting Standard SettingJournal of Accounting and Economics, 31
-
Demski Demski, Sappington Sappington (1999)
Summarization with Errors, A Perspective on Empirical Investigations of Agency RelationshipsManagement Accounting Research, 10
-
Core Core, Guay Guay, Verrecchia Verrecchia (2003)
Are Performance Measures Other than Price Important to CEO Incentives?The Accounting Review, 78
-
Ely Ely (1991)
Interindustry Differences in the Relation Between Compensation and Firm Performance VariablesJournal of Accounting Research, 29
-
Ohlson Ohlson (1999a)
Earnings, Book Values, and Dividends in a Stewardship Setting with Moral HazardContemporary Accounting Research, 16
-
Bushman Bushman, Indjejikian Indjejikian, Smith Smith (1996)
CEO Compensation: The Role of Individual Performance EvaluationJournal of Accounting and Economics, 21
-
Collins Collins, Kothari Kothari (1989)
An Analysis of Intertemporal and Cross‐Sectional Determinants of Earnings Response CoefficientsJournal of Accounting and Economics, 11
-
Biddle Biddle, Bowen Bowen, Wallace Wallace (1997)
Does EVA ® Beat Earnings? Evidence on Associations with Stock Returns and Firm ValuesJournal of Accounting and Economics, 24
-
Freeman Freeman, Tse Tse (1992)
A Nonlinear Model of Security Price Responses to Unexpected EarningsJournal of Accounting Research, 30
-
Gjesdal Gjesdal (1981)
Accounting for StewardshipJournal of Accounting Research, 19
-
Rogerson Rogerson (1997)
Intertemporal Cost Allocation and Managerial Investment Incentives: A Theory Explaining the Use of Economic Value Added as a Performance MeasureJournal of Political Economy, 105
-
Lambert Lambert (2001)
Contracting Theory in AccountingJournal of Accounting and Economics, 32
-
Murphy Murphy, Topel Topel (1985)
Estimation and Inference in Two‐Step Econometric ModelsJournal of Business and Economic Statistics, 3
-
Joskow Joskow, Rose Rose, Shepard Shepard (1993)
Regulatory Constraints on CEO CompensationBrookings Papers on Economic Activity, 1
-
Bryan Bryan, Hwang Hwang, Lilien Lilien (2000)
CEO Stock‐Based Compensation: An Empirical Analysis of Incentive‐Intensity, Relative Mix, and Economic DeterminantsJournal of Business, 73
-
Beaver Beaver, Lambert Lambert, Ryan Ryan (1987)
The Information Content of Security Prices: A Second LookJournal of Accounting and Economics, 9
-
Core Core, Guay Guay (1999)
The Use of Equity Grants to Manage Optimal Equity Incentive LevelsJournal of Accounting and Economics, 28
-
Hubbard Hubbard, Palia Palia (1995)
Executive Pay and Performance: Evidence from the U.S. Banking IndustryJournal of Finance and Economics, 39
-
Baber Baber, Kang Kang, Kumar Kumar (1996)
Investment Opportunities and the Structure of Executive CompensationJournal of Accounting and Economics, 21
-
Baker Baker (1992)
Incentive Contracts and Performance MeasurementJournal of Political Economy, 100
-
Kothari Kothari (2001)
Capital Markets Research in AccountingJournal of Accounting and Economics, 31
-
Feltham Feltham, Xie Xie (1994)
Performance Measure Congruity and Diversity in Multi‐Task Principal/Agent RelationsThe Accounting Review, 69
-
Ohlson Ohlson (1995)
Earnings, Book Value, and Dividends in Security ValuationContemporary Accounting Research, 11
-
Paul Paul (1992)
On the Efficiency of Stock‐Based CompensationReview of Financial Studies, 5
-
Sloan Sloan (1993)
Accounting Earnings and Top Executive CompensationJournal of Accounting and Economics, 16
-
Holmstrom Holmstrom, Milgrom Milgrom (1991)
Multi‐task Principal‐Agent Analyses: Incentive Contracts, Asset Ownership and Job DesignJournal of Law, Economics and Organizations, 7
-
Kormendi Kormendi, Lipe Lipe (1987)
Earnings Innovations, Earnings Persistence, and Stock ReturnsJournal of Business, 60
-
Banker Banker, Datar Datar (1989)
Sensitivity, Precision and Linear Aggregation of Signals for Performance EvaluationJournal of Accounting Research, 27
-
Easton Easton, Zmijewski Zmijewski (1989)
Cross‐Sectional Variation in Stock Market Response to Accounting Earnings AnnouncementsJournal of Accounting and Economics, 11
-
Kothari Kothari, Sloan Sloan (1992)
Information in Prices About Future Earnings: Implications for Earnings Response CoefficientsJournal of Accounting and Economics, 15
-
Bushman Bushman, Smith Smith (2001)
Financial Accounting and Corporate Governance.”Journal of Accounting and Economics, 32
-
Pagan Pagan (1984)
Econometric Issues in the Analysis of Regressions with Generated RegressorsInternational Economic Review, 25
- Publisher
- Wiley
- Copyright
- Copyright © 2006 Wiley Subscription Services, Inc., A Wiley Company
- ISSN
- 0021-8456
- eISSN
- 1475-679X
- DOI
- 10.1111/j.1475-679X.2006.00192.x
- Publisher site
- See Article on Publisher Site
Abstract
ABSTRACT In this paper, we seek a deeper understanding of how accounting information is used for valuation and incentive contracting purposes. We explore linkages between weights on earnings in compensation contracts and in stock price formation. A distinction between the valuation and incentive contracting roles of earnings in Paul (1992) produces the null hypothesis that valuation earnings coefficients (VECs) and compensation earnings coefficients (CECs) are unrelated. Our empirical analyses of the relations between earnings and both stock prices and executive compensation data at the firm and industry levels over the period 1971–2000 rejects Paul's (1992) hypothesis of no relation. We also document an increasing weight over time on other public performance information captured by stock returns in the determination of cash compensation. Specifically, we find that the incentive coefficient on returns is significantly higher in the second of two equal sample subperiods relative to the incentive coefficient on earnings.
Journal
Journal of Accounting Research – Wiley
Published: Mar 1, 2006