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首页> 外文期刊>Review of accounting studies >Why do managers avoid EPS dilution? Evidence from debt-equity choice
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Why do managers avoid EPS dilution? Evidence from debt-equity choice

机译：管理者为什么要避免每股收益摊薄？债务股权选择的证据

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摘要

Survey evidence reveals that managers prefer to avoid dilution of earnings per share (EPS), though financial theory suggests it is irrelevant in firm valuation. We explore contracting and behavioral explanations for this apparent paradox using a large sample of debt-equity issuers. We first provide evidence that firms with greater agency conflicts between managers and shareholders are more likely to use EPS as a performance measure in bonus contracts. After controlling for possible endogeneity related to compensation contract design, we find that managers are more likely to avoid earnings dilution when their bonus compensation explicitly depends upon EPS performance. This effect is increasing in the magnitude of bonus compensation for this subset of firms; we document no such associations for the firms that do not use EPS in setting bonus pay. Additional tests of firms' speed of adjustment to target leverage ratios and firms' debt conservatism levels indicate that explicitly rewarding executives on EPS performance helps to resolve underlever-aging problems. We also find that clientele effects are associated with managers' aversion to earnings dilution. Our findings provide a deeper understanding of the factors that underlie the use of accounting performance in compensation contracts and new evidence on the implications of the contracting role of accounting in firm decision-making.
机译：调查证据表明，尽管财务理论表明管理者与公司估值无关，但经理们更愿意避免稀释每股收益（EPS）。我们使用大量债权发行人的样本探索这种明显悖论的契约和行为解释。我们首先提供证据，证明经理与股东之间机构冲突更大的公司更可能将EPS用作奖金合同中的绩效指标。在控制了与薪酬合同设计相关的内生性之后，我们发现，当经理的奖金补偿明显取决于EPS绩效时，经理们更有可能避免收入稀释。这种影响正在增加这部分公司的奖金补偿的幅度；对于没有使用EPS设置奖金的公司，我们没有记录这样的协会。对企业调整至目标杠杆比率的调整速度和企业债务保守性水平的其他测试表明，对高管人员的每股收益绩效给予明确奖励有助于解决杠杆不足时代的问题。我们还发现，客户效应与管理者对收益稀释的厌恶有关。我们的发现提供了对在补偿合同中使用会计业绩的基础的更深入的理解，以及有关会计在企业决策中的合同作用的影响的新证据。

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  • 来源
    《Review of accounting studies》 |2014年第2期|877-912|共36页
  • 作者

    Rong Huang; Carol A. Marquardt; Bo Zhang;

  • 作者单位

    Stan Ross Department of Accountancy, Zicklin School of Business, Baruch College, City University of New York, One Bernard Baruch Way, New York, NY 10010, USA;

    Stan Ross Department of Accountancy, Zicklin School of Business, Baruch College, City University of New York, One Bernard Baruch Way, New York, NY 10010, USA;

    School of Business, Renmin University of China, No. 59 Zhongguancun Street, Haidian District,Beijing 100872, People's Republic of China;

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  • 原文格式 PDF
  • 正文语种 eng
  • 中图分类
  • 关键词

    Earnings per share (EPS); Dilution; Executive compensation; Debt-equity financing; Agency conflicts;

    机译：每股收益（EPS）;稀释;高管薪酬;债务股权融资;代理商冲突;

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