Executive compensation structure and earnings management: evidence from Australian listed firms in the period of governance reform
by Lan Sun
International Journal of Corporate Governance (IJCG), Vol. 12, No. 1, 2021

Abstract: Executive compensation incentive is a key factor in inducing management of earnings in firms. Using a sample of 3,326 firm-year observations covering 2000 to 2006 fiscal years, the analysis shows that in Australia managers who receive higher salary tend to engage in less earnings management whereas managers who receive more incentive payments tend to engage in more earnings management. Moreover, Australian firms are committed to a gradual increase in the incentive payments in responding to the regulation reform known as CLERP 9. Subsequently, executives who receive more option grants are more likely to engage in earnings management. These findings will have implications for regulators who intend to improve both the efficacy of CEO compensation structure and financial reporting quality.

Online publication date: Mon, 23-Aug-2021

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Corporate Governance (IJCG):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com