Payoffs to Aggressiveness

• 成果类型: Article
• 署名作者: Ecker, Frank; Francis, Jennifer; Olsson, Per; Schipper, Katherine
• 署名单位: Frankfurt School Finance & Management; Duke University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0385
• 发表日期: 2023
• 页码: 153-183
• 关键词: LONG-RUN PERFORMANCE; ceo overconfidence; stock returns; earnings management; corporate; acquisitions; incentives; INVESTMENT; RESTATEMENTS; hypothesis

摘要

For a broad sample of firms, we use structural equations modeling to construct latent variables for realaction aggressiveness and reporting policy aggressiveness. We estimate the association between the latent variables and the associations of each latent variable with shareholder payoffs (returns) and CEO payoffs (annual compensation to the CEO position). Results show the two types of aggressiveness are positively correlated but have different associations with the payoffs we consider. Greater policy-choice aggressiveness is associated with higher returns and compensation; the opposite is true for greater real-action aggressiveness. We find a positive association between policy-choice aggressiveness and restatement likelihood. Compared with nonrestatement firms, abnormal returns of restatement firms with aggressive policy choices are larger in the pre-restatement period and lower in the post-restatement period. Negative returns at the restatement announcement do not, on average, eliminate long-run (multi-year) positive returns of the pre-restatement period or of the period whose results are restated. JEL Classifications: M40; M41.