CEO incentive compensation and stock liquidity

被引:9
作者
Feng, Hongrui [1 ]
Yan, Shu [2 ]
机构
[1] Penn State Behrend, Black Sch Business, Erie, PA 16506 USA
[2] Oklahoma State Univ, Spears Sch Business, Stillwater, OK 74078 USA
关键词
CEO incentive compensation; Stock liquidity; 10-K reports; Stock split; Earnings management; INFORMATION ASYMMETRY; MANAGERIAL INCENTIVES; CORPORATE DISCLOSURE; CROSS-SECTION; CASH HOLDINGS; EARNINGS;
D O I
10.1007/s11156-018-0775-9
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
We document that the CEO pay-for-performance incentive positively predicts firm's stock liquidity. The evidence is consistent with the hypothesis that, to mitigate their undiversified price risk and reduce the transaction costs, CEOs with high pay-for-performance incentive compensations exert extra efforts in shaping firms' information environment to improve stock liquidity. We further identify three internal and two external channels through which incentivized CEOs stimulate firms' stock liquidity. Specifically, we find that firms with highly incentivized CEOs tend to provide earnings guidance, file more readable 10-K reports, and perform more stock splits. In addition, these firms attract larger analyst following and have lower earnings forecast dispersions.
引用
收藏
页码:1069 / 1098
页数:30
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