STOCK-BASED INCENTIVE COMPENSATION AND INVESTMENT BEHAVIOR

• 成果类型: Article
• 署名作者: BIZJAK, JM; BRICKLEY, JA; COLES, JL
• 署名单位: University of Rochester; Texas A&M University System; Texas A&M University College Station; Utah System of Higher Education; University of Utah
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/0165-4101(93)90017-A
• 发表日期: 1993
• 关键词: MANAGERIAL; performance; FIRMS

摘要

This paper examines how excessive concern over current stock price can motivate managers to use observable investment decisions to manipulate the market's inferences about the firm. The result can be overinvestment or underinvestment. Shareholders can induce optimal investment choices by structuring managerial compensation to balance both future and present stock-price performance. Our analysis suggests that firms with high/persistent informational asymmetries between managers and shareholders will tend to favor contracts that focus on long-run stock returns (both current and future) over contracts that focus on near-term stock returns alone. Our empirical results, as well as other results in the literature, are generally consistent with this hypothesis.