The Effect of Clawback on Managerial Use of Expectations Management and Market Consequences
| dc.contributor.committeeChair | Oler, Derek | |
| dc.contributor.committeeMember | Chi, Sabrina | |
| dc.contributor.committeeMember | Hart, Matt | |
| dc.creator | Guo, Savannah (Yuanyuan) | |
| dc.date.accessioned | 2024-03-04T16:45:28Z | |
| dc.date.available | 2024-03-04T16:45:28Z | |
| dc.date.issued | 2018-05 | |
| dc.description.abstract | Since 2007, voluntary adoption of compensation Clawback provisions has grown prevalent among U.S. listed firms. By 2014, approximately 50% of Russell 3000 firms had adopted such policies. Clawback provisions allow adopting firms to recoup incentive-based compensation paid to executives if misstatements in prior financial reports are later discovered. Researchers assert that Clawbacks could impose unintended consequences on adopting firms. I contribute to this argument by providing empirical evidence that Clawback firms are more likely to issue downward earnings guidance to lower analysts-set earnings goals. This is consistent with the notion that Clawback adoptions encourage managers to use methods other than accruals management to achieve earnings goals without risking triggering a Clawback. I also find a significantly weaker market reaction to downward guidance issuance and earnings surprises announcements post-Clawback. These results are robust to controlling for the decision to adopt a Clawback provision voluntarily. Overall, my findings suggest that although the stock market provides less pressure to meet earnings goals post-Clawback, opportunistic managers continue to fixate on playing the “numbers game” and they do so by managing analyst expectations. | |
| dc.format.mimetype | Application/pdf | |
| dc.identifier.uri | https://hdl.handle.net/2346/97684 | |
| dc.language.iso | en | |
| dc.rights.availability | Restricted until 03/2023. | |
| dc.subject | Compensation Clawback Provisions | |
| dc.subject | Earnings Guidance | |
| dc.subject | Stock Returns | |
| dc.title | The Effect of Clawback on Managerial Use of Expectations Management and Market Consequences | |
| dc.type | Dissertation | |
| thesis.degree.department | Business Administration | |
| thesis.degree.discipline | Accounting | |
| thesis.degree.grantor | Texas Tech University | |
| thesis.degree.level | Doctoral | |
| thesis.degree.name | Doctor of Philosophy |