CEO INCENTIVES AND EARNINGS
MANAGEMENT
Daniel Bergstresser, Thomas Philippon (2006)
, MAIN IDEA
Firms in which CEO wealth is more sensitive to stock price and option-
based compensation exhibit higher levels of accrual-based earnings
management.
Moreover, periods of unusually high accruals are associated with increased
insider activity: CEOs and other insiders are more likely to exercise stock
options and sell shares.
MANAGEMENT
Daniel Bergstresser, Thomas Philippon (2006)
, MAIN IDEA
Firms in which CEO wealth is more sensitive to stock price and option-
based compensation exhibit higher levels of accrual-based earnings
management.
Moreover, periods of unusually high accruals are associated with increased
insider activity: CEOs and other insiders are more likely to exercise stock
options and sell shares.
