Asymmetric treatment of reported pension expense and income amounts in CEO cash compensation calculations

• 成果类型: Article
• 署名作者: Comprix, Joseph; Muller, Karl A., III
• 署名单位: Arizona State University; Arizona State University-Tempe; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2005.12.002
• 发表日期: 2006
• 关键词: executive-compensation; restructuring charges; ACCOUNTING EARNINGS; performance; components

摘要

We provide evidence that CEO cash compensation is relatively less sensitive to pension expense than pension income, suggesting that compensation committees shield CEO cash compensation from pension expense amounts. We also provide evidence that managers use relatively higher expected rate of return estimates when reporting pension income, suggesting that managers select income-increasing accounting estimates in response to compensation committees' greater emphasis on pension income in CEO cash compensation determinations. Pension cost amounts represent a unique setting to examine such behavior as their effect on CEO cash compensation can be detrimental or beneficial, but arise from the same underlying economic activity. (c) 2006 Elsevier B.V. All rights reserved.