Accounting Seminar（2014-11）

Topic：Optimal Contracts and Career Concerns with Window-Dressing

Speaker:Xiaojing Meng, NYU-Stern School of Business

Time:: Wednesday,03 September, 10:00-11:30am

Location:Room K02, Guanghua Building 2

Organizer:Department of Accounting,MPAcc GSM, PKU

Abstract：

Accounting numbers are frequently used as performance measures to evaluate managers, but are often subject to manipulation. Incentives to manipulate the performance measures typically arise from a manager's explicit compensation being dependent on that measure of performance. A less explored reason for manipulation (but no less important) is a manager's career concerns. Explicit compensation and career concerns are different in that the latter are not under the control of shareholders, and must be carefully considered when designing explicit compensation. This paper studies how a manager's career concerns affect the optimal explicit compensation contracts, their effciency and managerial behavior in the presence of window-dressing.

Your participation is warmly welcomed!