Discussion of “Are CEOs compensated for value destroying growth in earnings?”
Review of Accounting Studies , Volume 15 - Issue 3 p. 578- 583
This discussion provides several explanations for the evidence presented in Balachandran and Mohanram (2010) that are consistent with efficient contracting. I also show that—contrary to the suggestion of the title—CEOs do not benefit from value destroying growth in earnings. Finally, I argue that there is no conclusive evidence that corporate investments destroy value.