Empirical Study On The Influence Of Executive Compensation Incentive On Classified Transfer Earnings Management

Executive compensation incentive is an effective method to solve the agency problem between shareholders and managers,which has been one of the hot spots in the accounting field.Because of the information asymmetry between shareholders and managers and the incompleteness of the contract,it is possible for executives to manipulate the reported earnings to obtain the benefits of compensation incentive.Existing studies of executive compensation incentive effect on earnings management focus on two types of earnings management methods: accrual project manipulation and real activity manipulation.However,with the introduction of relevant policies and norms of executive compensation incentive,especially the further definition of equity incentive norms,core earnings become an important performance evaluation index.In order to obtain the benefits of compensation incentive,executives may adopt the third type of earnings management in addition to accrual project manipulation and real activity manipulation.This paper focuses on the third type of earnings management,namely classified transfer earnings management.This paper selects A-share listed companies in 2012-2018 as research samples and mainly uses EXCEL and SPSS software to process the data and to analyze the influence of cash compensation incentive and equity incentive on the classified transfer earnings management by the method of multiple linear regression.At the same time,this paper further explores whether the way of equity incentive and time constraint conditions will have an impact on classified transfer earnings management.The conclusions of this paper show that cash compensation incentive will induce executives to conduct more classified transfer earnings management,the implementation of equity incentive will induce executives to conduct more classified transfer earnings management,and the degree of classified transfer earnings management induced by restricted stock is higher than that of stockoptions.The conclusion also shows that the longer the term of equity incentive,the higher the degree of classified transfer earnings management.Finally,based on the empirical results of this paper,the relevant policy recommendations of optimizing the design of executive compensation incentive scheme and inhibiting classified transfer earnings management are proposed.