主题：Guide Pessimistically before the Annual Incentive Plan Approval（年度激励计划批准前管理层的悲观盈余预测）
Corporate boards determine the performance metric for CEOs’ annual incentive plans (AIP) at compensation committee meetings at the beginning of a fiscal year. We show that management issues downward-biased earnings guidance before these meetings that leads to a negative revision of analyst forecasts, which serve as an anchor for setting the performance goal in the AIP. This downward bias in earnings guidance is present when the performance metric is linked to earnings such as Earnings-Per-Share (EPS), but not when the performance metric is linked to revenue. In addition, pessimistic guidance is more pronounced when analyst forecasts are optimistic, or when shareholders actively monitor the firm. We find that pessimist event-window guidance is less pronounced for young and new CEOs. Last, CEOs have lower EPS performance targets and receive higher bonus payout for firms issuing more pessimistic event-window guidance.
主讲人简介:Jun Yang is an Associate Professor of Finance at Kelley School of Business, Indiana University. Her research interests include optimal contracting, corporate governance, and executive compensation. Jun’s work on opportunistic managerial behavior in compensation peer benchmarking practice was published by the Journal of Financial Economics (JFE) and Review of Financial Studies. Her most recent publication at the JFE documents the characteristics and economic determinants of executive signing bonuses. Jun’s current research investigates opportunistic managerial behavior related to executive pensions and various factors that may affect the nature of director independence (e.g., collusive insider selling of independent directors with the CEO, and corporate charitable contributions to independent directors-affiliated charities).