| Titre | Do CEOs Manipulate R&D Expenses to Increase their Bonus? French Evidence | |
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| Auteur | Alexandre Di Giacomo, Enrico Prinz | |
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Revue | Finance |
| Numéro | volume 46, no 2, 2025 | |
| Page | 132-171 | |
| Résumé anglais |
Do top executives engage in the manipulation of real activities to boost their short-term compensation? By combining hand-collected compensation data with firm-level information, we analyze the link between adjustments in research and development (R&D) expenses and bonus plans of French CEOs, focusing on the CEO's bonus position. Utilizing panel data, we observe a negative relationship between bonus achievement levels and changes in R&D expenses. Notably, companies whose CEOs fail to meet their target bonus show lower growth in R&D expenses and are more likely to reduce such expenses. Adjustments in R&D expenses further rely on bonus criteria and occur more frequently when performance indicators underlying the bonus depend more heavily on pre-depreciation and amortization measures, which are impacted by R&D expenses. Our findings, remaining significant after robustness checks, corroborate prior research indicating that top executives manipulate earnings-based bonus plans to inflate their short-term compensation. JEL Classification: G34, M12 Source : Éditeur (via Cairn.info) |
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| Article en ligne | https://shs.cairn.info/revue-finance-2025-2-page-132?lang=fr (accès réservé) |
