October 11, 2016
Does Holding Stock Make Executives Prone to Accounting Errors?
– Broc Romanek
Here’s an excerpt from this MarketWatch piece:
New research suggests chief executives and chief financial officers with a high proportion of stock-based pay are more likely to downplay material accounting errors so they can maximize compensation and minimize potential liability. “It is unsurprising,” wrote Brian Hogan, a clinical assistant professor of business administration at the University of Pittsburgh, and Case Western Reserve University associate professor of accountancy Gregory A. Jonas, “that executives take actions to maximize their compensation.”