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.

Additional Metadata
Keywords corporate investments, executive compensation, profitability
JEL Mergers; Acquisitions; Restructuring; Corporate Governance (jel G34), Accounting (jel M41)
Persistent URL,
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