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Essays on the target setting in executive annual bonus contracts : 최고경영자 연간 성과급 계약에 관한 연구
DC Field | Value | Language |
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dc.contributor.advisor | 신재용 | - |
dc.contributor.author | 권세원 | - |
dc.date.accessioned | 2017-10-27T16:30:51Z | - |
dc.date.available | 2017-10-27T16:30:51Z | - |
dc.date.issued | 2017-08 | - |
dc.identifier.other | 000000145689 | - |
dc.identifier.uri | https://hdl.handle.net/10371/136683 | - |
dc.description | 학위논문 (박사)-- 서울대학교 대학원 경영대학 경영학과, 2017. 8. 신재용. | - |
dc.description.abstract | My dissertation examines the determinants on the target setting of executive annual bonus contracts.
Prior research in managerial accounting has documented that external information, such as peer performance, is typically used in target setting. However, there is only limited evidence of what specific information is actually used in this process. My first essay examines how analysts annual earnings forecasts influence target setting for executives bonus contracts. I provide novel evidence that analyst forecasts are positively associated with firms bonus target revisions. Furthermore, the use of analyst forecasts in target setting is less pronounced when the forecasts are noisier, and it is more prominent when analysts have an informational advantage over managers. I find that target ratcheting is attenuated for favorable performance and becomes severe for unfavorable performance when past performance is greater than analyst forecasts. Finally, the results from additional analyses are not consistent with alternative explanations that both bonus target revisions and analyst forecasts are influenced by internal planning information or that analyst forecasts are influenced by bonus target revisions (i.e., reverse causality). Recent studies have suggested that annual bonus has an incentive effect comparable to stock compensation (Frydman and Jenter 2010 | - |
dc.description.abstract | Jensen and Murphy 2011 | - |
dc.description.abstract | Guay, Kepler, and Tsui 2016). However, only a limited number of papers have addressed annual bonuses. The aim of my second essay is 1) to overview the comprehensive landscape of executive bonus plans 2) and to investigate the determinants of pay-for-performance sensitivity (hereafter, PPS) and the convexity of annual incentives. I find that the 80/120% rule for target setting holds on average, with differences across industries. I also show that firms growth options are one of the key elements in determining bonus PPS and the convexity of bonus payouts after controlling for peer information and other economic factors. | - |
dc.description.tableofcontents | Essay I. The Use of Analyst Forecasts in the Target Setting of Executive Annual Bonus Contracts 1
I. Introduction 2 II. Related Literature and Hypothesis Development 14 III. Sample and Research Design 27 3.1.Sample 27 3.2.Research Design 28 IV. Descriptive Statistics 31 V. Empirical Results 33 5.1. Do Boards Incorporate Analyst Forecasts in the Target Setting of Their Executive Annual Bonus Contracts (H1)? 33 5.2. The Effects of Noise in Analyst Forecasts and Analysts Information Advantage Over Management on the Use of Analyst Forecasts in Target Setting (H2 and H3) 36 5.3. The Use of External Benchmark information on the Magnitude of Target Ratcheting (H4) 39 VI. Additional Analyses 40 6.1. Comparing the Relative Importance of Analyst Forecasts versus Management Forecasts in Target Setting 40 6.2. Potential Reverse Causality: Analyst Forecast Revisions Around the Approval Date of the Annual Bonus Plan 46 6.3. Time-series Analysis 47 6.4. Alternative Growth Proxies 478 VII. Conclusion 49 Appendix A.2014 Proxy Statement of Biogen Inc 51 Appendix B.2014 Proxy Statement of El Paso Electronic Company 52 Appendix C.Variable Definitions 53 Reference 56 Essay II. The Structure of CEO Bonus Contracts 75 I. Introduction 76 II. Related Literature and Hypothesis Development 80 2.1. Annual Bonus Contracts 80 2.2. Pay for Performance Sensitivity 82 2.3. Pay Convexity 88 III. Research Design and Sample 91 3.1. Research Design 91 3.2. Sample Selection and Descriptive Statistics 96 IV. Empirical Results 97 V. Conclusion 104 Appendix A. 2014 Proxy Statement of El Paso Electronic Company 105 Appendix B. The example of Estimating Bonus Pay-for-performance Sensitivity using data from Monsanto Company 106 Appendix C. Variable Definitions 107 Reference 109 | - |
dc.format | application/pdf | - |
dc.format.extent | 876688 bytes | - |
dc.format.medium | application/pdf | - |
dc.language.iso | en | - |
dc.publisher | 서울대학교 대학원 | - |
dc.subject | Executive compensation | - |
dc.subject | annual bonuses | - |
dc.subject | analyst forecasts | - |
dc.subject | performance targets | - |
dc.subject | Pay-for-performance sensitivity | - |
dc.subject | Pay convexity | - |
dc.subject.ddc | 658 | - |
dc.title | Essays on the target setting in executive annual bonus contracts | - |
dc.title.alternative | 최고경영자 연간 성과급 계약에 관한 연구 | - |
dc.type | Thesis | - |
dc.description.degree | Doctor | - |
dc.contributor.affiliation | 경영대학 경영학과 | - |
dc.date.awarded | 2017-08 | - |
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