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http://dx.doi.org/10.14400/JDC.2019.17.4.107

The Effect of Management Forecast Precision on CEO Compensation -Focusing on Bad news Firm-  

Lee, Eun-Ju (Business School, Pusan Natiional University)
Kim, Ha-Eun (Business School, Pusan Natiional University)
Publication Information
Journal of Digital Convergence / v.17, no.4, 2019 , pp. 107-114 More about this Journal
Abstract
This study analyzes the effect of the accuracy of future management performance, which managers voluntarily announce in the previous year's disclosure, on managers compensation. In the case of a company that disclosed the bad news in the previous year, the ability to predict uncertain future will be more important, and expects executives with better predictability to receive more compensation. The results of this study show that there is a significant negative(-) relationship between the accuracy of the manager's earnings forecast and the performance - compensation of the firms that disclosed the bad news in the previous year. The accuracy of the manager's disclosure is important, and it is confirmed that the manager's compensation increases as the incentive of the manager's effort to reduce future uncertainty. The results of this study are as follows: there is a positive relationship between the managerial performance and the managerial competence of managers. It is important to note that there is a difference and that we have identified additional determinants of the manager compensation contract.
Keywords
CEO Compensation; Bad News Earning Forecast; Forecast Precision; Good News;
Citations & Related Records
Times Cited By KSCI : 5  (Citation Analysis)
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