Earnings patterns and CEO contractual outcomes
研究了盈利模式的长度与CEO薪酬和离职率的关系，发现盈利持续增长或下降会带来递增的奖励或惩罚，但存在上下限，且受公司治理、盈利持续性和市场竞争影响。
We investigate how earnings patterns could influence CEO compensation and CEO turnover. We find that the length of an earnings pattern has a curvilinear relation with CEO pay and retention. CEOs who report increasing (decreasing) earnings patterns receive incremental rewards (penalties), which decline as the earnings strings become longer. These upper and lower bounds of the rewards and penalties for the CEOs align with the market valuation of earnings patterns and reflect a tradeoff between inducing productive effort and diminishing managerial entrenchment as these patterns evolve. Additional evidence suggests that the relationship between earnings patterns and CEO compensation is largely driven by firms with strong corporate governance, high earnings persistence, and low market competition. The findings are not attributable to different measures of accounting quality and growth identified in prior research. Our results suggest that earnings patterns play a distinct role in their use for CEO contracts.