Discussion of “Are CEOs compensated for value destroying growth in earnings?”
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.
|Keywords||corporate investments, executive compensation, profitability|
|JEL||Mergers; Acquisitions; Restructuring; Corporate Governance (jel G34), Accounting (jel M41)|
|Persistent URL||dx.doi.org/10.1007/s11142-010-9125-4, hdl.handle.net/1765/20739|
|Series||ERIM Top-Core Articles|
|Journal||Review of Accounting Studies|
Dittmann, I. (2010). Discussion of “Are CEOs compensated for value destroying growth in earnings?”. Review of Accounting Studies, 15(3), 578–583. doi:10.1007/s11142-010-9125-4