DOI QR코드

DOI QR Code

The Effect of Management Forecast Precision on CEO Compensation-Accounting Performance

경영자 이익예측 정확성이 성과-보상에 미치는 영향

  • Lee, Eun-Ju (Business School, Pusan National University) ;
  • Sim, Won-Mi (Business School, BUSAN INSTITUTE OF SCIENCE AND TECHNOLOGY) ;
  • Kim, Jeong-Kyo (Business School, Pusan Natiional University)
  • 이은주 (부산대학교 경영학과) ;
  • 심원미 (부산과학기술대학교 경영과) ;
  • 김정교 (부산대학교 경영학과)
  • Received : 2018.08.03
  • Accepted : 2018.10.20
  • Published : 2018.10.28

Abstract

The purpose of this study is to analyze the effect of managerial predictive accuracy on managerial performance-compensation. In this study, we compared managerial performance with managerial performance, And to analyze the relationship between manager compensation and manager compensation using managerial profit prediction accuracy. As a result of this study, there is a significant positive relationship between profit prediction accuracy and manager compensation, which can be interpreted as a result of manager's ability to compensate manager's ability to predict the future well. In this paper, we propose a new methodology that can be used to analyze the effects of managerial compensation on managerial compensation. This is because there is a difference in that it is proved to be a factor. Therefore, it is important to note that the prediction of the future of the company also identifies the additional determinants that affect manager compensation contracts with the key managerial capabilities.

Keywords

CEO Compensation;Future Performance;Earning Forecast;Forecast Precision;Performance-Compensaion

References

  1. K. I. Kim. (2018). The Relationship Between The Type of R&D Investment and a Firm's Performance. Journal of Convergence for Information Technology, 8(4), 213-217.
  2. C. F. Noe. (1999). Voluntary disclosures and insider transactions. Journal of Accounting and Economics, 27(3), 305-326. https://doi.org/10.1016/S0165-4101(99)00014-2
  3. P. M.. Healy & K. G. Palepu. (1995). The challenges of investor communication The case of CUC International, Inc. Journal of Financial Economics, 38(2), 111-140. https://doi.org/10.1016/0304-405X(94)00814-H
  4. F. A. Lees. (1981). Public disclosure of corporate earnings forecasts. Conference Board.
  5. G. Waymire. (1984). Additional evidence on the information content of management earnings forecasts. Journal of Accounting Research, 703-718. DOI: 10.2307
  6. W. S. Jung. (1997). The Accuracy of Managers' Earnings Forecasts and Relevance as Proxies for Market Expectation of Earnings. Korean Journal of Financial Studies, 21(1), 265-294.
  7. W. S. Jung. (2000). The Discretionary Disclosure of Managers' Forecasts and Firm Characteristics. Korean Journal of Business Administration, 23, 113-142.
  8. S. S. Yoon, M. K. An & D. Y. Ko. (2007). The Effect of Corporate Boards and Audit Committees on Management Forecasts. Working paper.
  9. J. Core & W. Guay. (1999). The use of equity grants to manage optimal equity incentive levels. Journal of accounting and economics, 28(2), 151-184. https://doi.org/10.1016/S0165-4101(99)00019-1
  10. S. K. Chi, S. W. Shin & M. J. Jeon. (2012). The Effects of Accounting Conservatism level on Managers' cash compensation : accounting performance Sensitivity. KOREAN JOURNAL OF MANAGEMENT ACCOUNTING RESEARCH, 12(2), 87-117.
  11. M. J. Chung & E. H. Koh. (2008). An Analysis of Strategic Use of Performance Measures in Executive Compensation Contracts. KOREAN JOURNAL OF MANAGEMENT ACCOUNTING RESEARCH, 8(1), 91-119.
  12. S. G. Kim. (2017). The Effect of Management Earnings Forecasts on Future Earnings Quality. Journal of the Korea Convergence Society, 8(11), 363-372. https://doi.org/10.15207/JKCS.2017.8.11.363
  13. J. H. Jeon. (2018). The Effect of Abnormal investment on Analyst Earnings Forecast. Journal of the Korea Convergence Society, 9(2), 207-215. https://doi.org/10.15207/JKCS.2018.9.2.207
  14. C. U. Hong, S. H. Lee & K. L. Kim. (2017). The Effect of Analysts' Earnings Forecasts Following Dividend Announcements on Stock Returns. Journal of Convergence for Information Technology, 7(3), 105-109. https://doi.org/10.22156/CS4SMB.2017.7.3.105
  15. C. A. Botosan. (1997). Disclosure level and the cost of equity capital. Accounting review, 323-349.
  16. S. Rosen. (1982). Authority, control, and the distribution of earnings. The Bell Journal of Economics, 311-323.
  17. S. K. Chi & T. S. Kim. (2001). The Empirical Relationship between Managers' Compensation and Characteristics of Accounting Income. Korean Accounting Review, 26(1), 25-54.
  18. C. W. Smith & R. L. Watts. (1992). The investment opportunity set and corporate financing, dividend, and compensation policies. Journal of financial Economics, 32(3), 263-292. DOI : 10.1016 https://doi.org/10.1016/0304-405X(92)90029-W
  19. T. S. An & Y. G. Lee. (2003). Is Executive Compensation Sticky? Korean Accounting Journal, 12(1), 65-85
  20. N. C. Agarwal. (1981). Determinants of executive compensation. Industrial Relations: A Journal of Economy and Society, 20(1), 36-45. https://doi.org/10.1111/j.1468-232X.1981.tb00180.x
  21. E. F. Fama. (1980). Agency problems and the theory of the firm. Journal of political economy, 88(2), 288-307. DOI10.1086 https://doi.org/10.1086/260866
  22. S. K. Chi, S. W. Shin & S. W. Byun. (2009). The Effect of Capital Structure on Managers' Pay-Performance Sensitivity. KOREAN JOURNAL OF MANAGEMENT ACCOUNTING RESEARCH, 9(2), 1-30.
  23. B. Holmstrom. (1979). Moral hazard and observability. The Bell journal of economics, 74-91.
  24. R. Antle & A. Smith. (1986). An empirical investigation of the relative performance evaluation of corporate executives. Journal of Accounting Research, 1-39.
  25. T. S. Kim, J. S. Jung & S. K. Chi. (1999). The Relationship between Managerial Compensation and Performance in Korean Companies. Korean Accounting Review, 24(2), 87-115.
  26. E. S. Lee. (2012). Audit Fees, Audit Hours, and Directors' Cash Compensation. Journal of Finance and Accounting Information, 12(1), 231-250.
  27. P. M. Healy & K. G. Palepu. (1993). The effect of firms' financial disclosure strategies on stock prices. Accounting Horizons, 7(1), 1.
  28. R. E. Verrecchia. (2001). Essays on disclosure. Journal of accounting and economics, 32(1-3), 97-180. https://doi.org/10.1016/S0165-4101(01)00025-8
  29. D. J. Skinner. (1994). Why firms voluntarily disclose bad news. Journal of accounting research, 32(1), 38-60. https://doi.org/10.2307/2491386
  30. B. Trueman. (1986). Why do managers voluntarily release earnings forecasts?. Journal of accounting and economics, 8(1), 53-71. https://doi.org/10.1016/0165-4101(86)90010-8
  31. M. C. Jensen & K. J. Murphy. (1990). Performance pay and top-management incentives. Journal of political economy, 98(2), 225-264. https://doi.org/10.1086/261677
  32. R. A. Lambert & D. F. Larcker. (1987). An analysis of the use of accounting and market measures of performance in executive compensation contracts. Journal of Accounting research, 85-125.