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Why and how firms use operating cash flow in compensation

Why and how firms use operating cash flow in compensation

 Akono, Henri.
 2017.
 p. 400-426. English
Quản lí đầu tư.Investment Management.Vốn lưu động.Performance evaluation.Bồi thường CEO.Bồi thường CFO.Cash flow performance.CEO compensation.+ 3 từ khóa
Tác giả CN Akono, Henri.
Nhan đề Why and how firms use operating cash flow in compensation / Henri Akono, Emeka T. Nwaeze.
Thông tin xuất bản 2017.
Mô tả vật lý p. 400-426.
Tóm tắt This study considers the choice of operating cash flow (OCF) in contracts and further examines the sensitivity of the CFO s and CEO s compensation to OCF performance, conditional on our stylized indicator of the importance of working capital management (WCM). The analysis depicts OCF as conveying distinct information about WCM, and predicts that firms for which WCM is an important source of value are more likely to contract on OCF. The importance of WCM is instrumented by firm conditions that create strong demand for WCM, including large working capital, rapid growth in working capital, highly volatile working capital, and large debt relative to total assets. Using a sample of firms whose incentive plans explicitly include OCF measures and a control sample of firms without such plans, we show that all four indicators of the importance of WCM have positive association with the likelihood of contracting upon OCF, individually and collectively. In compensation regressions, we find that WCM importance has a pronounced positive effect on the weight of OCF, but muted effect on the weight of accrual earnings. The results suggest that firms include measures of OCF performance in contracts largely to provide incentives for WCM and internal cash generation.
Thuật ngữ chủ đề Quản lí đầu tư.
Thuật ngữ chủ đề Investment Management.
Từ khóa tự do Vốn lưu động.
Từ khóa tự do Performance evaluation.
Từ khóa tự do Bồi thường CEO.
Từ khóa tự do Bồi thường CFO.
Từ khóa tự do Cash flow performance.
Từ khóa tự do CEO compensation.
Từ khóa tự do CFO compensation.
Từ khóa tự do Đánh giá hiệu suất.
Từ khóa tự do Ưorking capital management.
Tác giả(bs) CN Nwaeze, Emeka T.
Nguồn trích Accounting and Business Research- Vol.48, No.4
MARC
Hiển thị đầy đủ trường & trường con
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100[1 ] |a Akono, Henri.
245[1 0] |a Why and how firms use operating cash flow in compensation / |c Henri Akono, Emeka T. Nwaeze.
260[ ] |c 2017.
300[1 0] |a p. 400-426.
520[ ] |a This study considers the choice of operating cash flow (OCF) in contracts and further examines the sensitivity of the CFO s and CEO s compensation to OCF performance, conditional on our stylized indicator of the importance of working capital management (WCM). The analysis depicts OCF as conveying distinct information about WCM, and predicts that firms for which WCM is an important source of value are more likely to contract on OCF. The importance of WCM is instrumented by firm conditions that create strong demand for WCM, including large working capital, rapid growth in working capital, highly volatile working capital, and large debt relative to total assets. Using a sample of firms whose incentive plans explicitly include OCF measures and a control sample of firms without such plans, we show that all four indicators of the importance of WCM have positive association with the likelihood of contracting upon OCF, individually and collectively. In compensation regressions, we find that WCM importance has a pronounced positive effect on the weight of OCF, but muted effect on the weight of accrual earnings. The results suggest that firms include measures of OCF performance in contracts largely to provide incentives for WCM and internal cash generation.
650[0 0] |a Quản lí đầu tư.
650[0 0] |a Investment Management.
653[0 ] |a Vốn lưu động.
653[0 ] |a Performance evaluation.
653[0 ] |a Bồi thường CEO.
653[0 ] |a Bồi thường CFO.
653[0 ] |a Cash flow performance.
653[0 ] |a CEO compensation.
653[0 ] |a CFO compensation.
653[0 ] |a Đánh giá hiệu suất.
653[0 ] |a Ưorking capital management.
700[1 ] |a Nwaeze, Emeka T.
773[ ] |t Accounting and Business Research |g Vol.48, No.4
890[ ] |a 0 |b 0 |c 0 |d 0