CEO After-Tax Compensation Incentives and Corporate Tax Avoidance

• 成果类型: Article
• 署名作者: Gaertner, Fabio B.
• 署名单位: University of Wisconsin System; University of Wisconsin Madison
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12058
• 发表日期: 2014
• 页码: 1077-1102
• 关键词: sensitivity; performance; income; selection; plans; RISK; BIAS

摘要

I examine the association between CEOs' after-tax incentives and their firms' level of tax avoidance. Economic theory holds that firms should compensate CEOs on an after-tax basis when the expected tax savings generated from additional incentive alignment outweigh the incremental compensation demanded by CEOs for bearing additional tax-related compensation risk. Using hand-collected data from proxy statements, I find a negative relation between the use of after-tax incentives and effective tax rates. I also find a positive association between the use of after-tax incentives and CEO cash compensation, suggesting that CEOs who are compensated on an after-tax basis demand a premium for bearing additional risk.