Trading incentives to meet the analyst forecast

• 成果类型: Article
• 署名作者: McVay, Sarah; Nagar, Venky; Tang, Vicki Wei
• 署名单位: New York University; University of Michigan System; University of Michigan; Georgetown University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-006-9017-9
• 发表日期: 2006
• 页码: 575-598
• 关键词: stock option awards; earnings management; voluntary disclosures; equity incentives; TEMPORAL ANALYSIS; INFORMATION; accruals

摘要

We examine stock sales as a managerial incentive to help explain the discontinuity around the analyst forecast benchmark. We find that the likelihood of just meeting versus just missing the analyst forecast is strongly associated with subsequent managerial stock sales. Moreover, we provide evidence that managers manage earnings prior to just meeting the threshold and selling their shares. Finally, the relation between just meeting and subsequently selling shares does not hold for non-manager insiders, who arguably cannot affect the earnings outcome, and is weaker in the presence of an independent board, suggesting that good corporate governance mitigates this strategic behavior.