Foundations and Trends® in Accounting > Vol 4 > Issue 2

Executive Compensation and Financial Accounting

David Aboody, Anderson Graduate School of Management, University of California at Los Angeles, USA, david.aboody@anderson.ucla.edu Ron Kasznik, Graduate School of Business, Stanford University, USA, kasznik_ron@gsb.stanford.edu
 
Suggested Citation
David Aboody and Ron Kasznik (2010), "Executive Compensation and Financial Accounting", Foundations and TrendsĀ® in Accounting: Vol. 4: No. 2, pp 113-198. http://dx.doi.org/10.1561/1400000006

Published: 21 Apr 2010
© 2010 D. Aboody and R. Kasznik
 
Subjects
Executive compensation,  Corporate governance
 
Keywords
Executive compensationFinancial reportingDisclosureAccounting regulationFinancial accountingCorporate financeAccounting regulations
 

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In this article:
1. Introduction
2. Does Executive Compensation Affect Financial Accounting Choices?
3. Does Executive Compensation Affect Voluntary Disclosure Choices?
4. Does Financial Reporting Regulation Affect the Structure of Executive Compensation Plans?
5. Does Income Tax Regulation Affect the Structure of Executive Compensation Plans?
6. Concluding Remarks
Acknowledgments
References

Abstract

In this monograph we provide research perspectives on the relation between executive compensation and firms' financial reporting and disclosure policies. In particular, we examine the two primary contexts in which this relation has been examined in the extant literature. The first issue we examine is the extent to which the structure of executive compensation plans, particularly the use of earnings- and stock-based compensation, induces certain financial reporting and disclosure choices. The second issue we examine is the extent to which accounting regulation related to financial reporting and income taxation creates incentives for firms to design certain compensation plans for their executives. We highlight the key inferences from these areas of research and offer some suggestions for the development of a more integrated research agenda.

DOI:10.1561/1400000006
ISBN: 978-1-60198-342-8
96 pp. $70.00
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ISBN: 978-1-60198-343-5
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Table of contents:
1. Introduction
2. Does Executive Compensation affect Financial Accounting Choices?
3. Does Executive Compensation affect Voluntary Disclosure Choices?
4. Does Financial Reporting Regulation Affect the Structure of Executive Compensation Plans?
5. Does Income Tax Regulation Affect the Structure of Executive Compensation Plans?
6. Concluding Remarks
References

Executive Compensation and Financial Accounting

Executive Compensation and Financial Accounting provides research perspectives on the interface between financial reporting and disclosure policies and executive compensation. In particular, it focuses on two important dimensions: the effects of compensation-based incentives on executives' financial accounting and disclosure choices, and the role of financial reporting and income tax regulations in shaping executive compensation practices.

Executive Compensation and Financial Accounting examines the key dimensions of the relation between financial accounting and executive compensation. Specifically, the authors examine the extent to which compensation plans create incentives for executives to make particular financial reporting and disclosure choices. They also examine the extent to which accounting regulation creates incentives for firms to design particular compensation plans for their executives.

 
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