Risk-Taking Incentives and Earnings Management: New Evidence

Earnings management is the use of accounting methods by managers to manipulate financial statements in order to inaccurately convey the financial performance of their company. Earnings management is costly to stakeholders and society because it decreases the informativeness of earnings thereby distorting the economic efficiency of the stock market. Moreover, earnings management can also potentially […]

Good for Managers, Bad for Society? Causal Evidence on the Association Between Risk-Taking Incentives and Corporate Social Responsibility

Courtesy of Michael Mayberry Shareholders are increasingly interested in corporate social responsibility (CSR). However, as with nearly all corporate actions, shareholders are not the decision makers. Managers are. Therefore, shareholders must rely on compensation to incentivize managers towards the level of CSR they desire. To date, researchers know very little about how compensation incentivizes executives […]