Multi-Metric Vesting Schemes in Executive Performance Equity Grants

• 成果类型: Article
• 署名作者: Bocconi, Francesca Franco; Urcan, Oktay
• 署名单位: Bocconi University; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826; 1558-7967
• DOI: 10.2308/TAR-2024-0108
• 发表日期: 2026-03
• 页码: 215-248
• 关键词: performance equity grants; vesting schemes; binding clauses; earnings management; COMPENSATION; incentives; STOCK; aggregation; accruals; QUALITY; DESIGN; MARKET

摘要

Using a large sample of executive performance equity grants over 2006-2019, we provide a comprehensive representation of the single-and multi-metric vesting schemes used by U.S. public firms and investigate the incentives provided by alternative functional forms of vesting formulas that combine earnings with stock returns and other nonearnings targets. Our results indicate that, compared to earnings-vesting single-and multi-metric summative grants, binding schemes that require the contemporaneous achievement of both earnings and nonearnings targets for grant vesting limit executive fixation on earnings and the associated incentives to maximize grant payouts by managing earnings around the targets. The findings confirm the expectation of different incentive effects from alternative (linear versus nonlinear) aggregations of multiple performance targets in the grant vesting formulas, with binding schemes being more effective in mitigating the risk of executives prioritizing earnings relative to other targets in multi-metric grants.