Share Repurchase Choice and Executive Pension Compensation

Autor:	Christine E. L. Tan, Susan M. Young
Rok vydání:	2015
Předmět:	Finance Pension 050208 finance Executive compensation Earnings business.industry Earnings per share 05 social sciences Share repurchase Accounting 050201 accounting Earnings management Shareholder 0502 economics and business Salary Business Business and International Management
Zdroj:	Journal of Management Accounting Research. 28:127-149
ISSN:	1558-8033 1049-2127
DOI:	10.2308/jmar-51280
Popis:	Shareholders and regulators have increasingly been calling upon firms to reign in executive compensation. Most of this discussion has focused on bonuses and stock options, the more observable portions of an executive compensation package. More difficult for investors to assess, however, is long-term incentive pay, such as supplemental executive retirement plans (SERPs), which has become a significant portion of executive compensation. Our study examines whether managers use accelerated share repurchases (ASRs) to increase total compensation through this under-emphasized form of pay. Managers wishing to increase their total compensation through an increase in earnings per share (EPS) should prefer ASRs, which generally have a more immediate and significant impact on EPS relative to open market repurchases (OMRs). For a sample of repurchase firms, we find evidence that managers who have performance-contingent SERPs in place (i.e., a SERP based on salary and bonus or on average earnings), together with EPS-based bonuses and a share repurchase that results in a higher EPS number, are significantly more likely to choose an ASR versus an OMR. JEL Classifications: G34; G35; M4; M41; M52. Data Availability: The data are available from public sources identified in this study.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::6275179f44a55b8af12cd49a2dd97696 https://doi.org/10.2308/jmar-51280 Zobrazit plný text záznamu