Performance‐vested Stock Options and Earnings Management*
研究英国240家最大非金融公司，发现高管持有绩效归属股票期权比例越高，越可能进行盈余管理，且临近归属期的期权激励效应最强。
Abstract: This paper investigates the effects of performance‐vested stock options (PVSOs) on the propensity of managers to engage in earnings management. Using observations from the 240 largest non‐financial firms in the UK, I show that managers are more likely to engage in earnings management when they hold a larger proportion of their compensation in PVSOs. When categorizing PVSOs on the basis of their distance from the end of performance periods, the results show that managerial incentives to manage earnings mainly stem from PVSOs that are granted in prior years but within a performance evaluation period (i.e., PVSOs before vesting). Moreover, vesting targets influence the relationship between earnings management and PVSO compensation. The findings are consistent with the earnings smoothing hypothesis: confronted with more ambitious vesting targets, managers who are heavily loaded with PVSOs before vesting will report higher performance by generating greater accounting accruals, whereas in years with good performance, these managers will have incentives to reduce current reported performance by managing earnings downward so they can increase earnings as needed in the future.