Managerial incentives, options, and cost-structure choices

被引：1
作者：
David Aboody
Shai Levi
Dan Weiss
机构：
[1] UCLA,Anderson School of Management
[2] Tel Aviv University,Coller School of Management
来源：
Review of Accounting Studies | 2018年 / 23卷
关键词：
Operating leverage; Cost structure; Managerial incentives; Option compensation; M41; M12; G31;
D O I：
暂无
中图分类号：
学科分类号：
摘要：
This study explores the relationship between changes in managerial risk-taking incentives and adjustments of firms’ cost structures, particularly the operating leverage (fixed-to-variable cost ratio). We find managers reduce operating leverage by substituting fixed costs with variable costs, mainly in the selling, general, and administrative (SG&A) and research and development (R&D) cost components, in response to reductions in option-based compensation following the issuance of FAS 123R. Managers facing a decrease in risk-taking incentives adjust operating leverage downward because high operating leverage intensifies the downside potential of earnings. Overall, we present compelling evidence that managers adjust the cost structure of their firms in response to a reduction in risk-taking incentives.
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收藏
页码：422 / 451
页数：29
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