Executive incentive compensation and earnings manipulation in a multi-period setting

R. Ramy Elitzur, Varda Yaari

Research output: Contribution to journalArticlepeer-review

29 Scopus citations


This study examines in a multi-period setting how trading of equity securities by managers and the awarding of such securities to managers affects earnings manipulation. The study explores the effect of an executive incentive compensation plan, comprised of bonus and equity holdings, on the reporting strategy of the manager under different degrees of market efficiency. The findings indicate that insider trading provides an informative signal about the direction of earnings manipulation. Furthermore, the results confirm that the choice of compensation scheme by owners tends to affect earnings manipulation.

Original languageEnglish
Pages (from-to)201-219
Number of pages19
JournalJournal of Economic Behavior and Organization
Issue number2
StatePublished - 1 Jan 1995
Externally publishedYes


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