| Summary: | 碩士 === 臺中技術學院 === 事業經營研究所 === 97 === Most of the studies that investigated the relationship between pay-for- performance and earnings management focused on the manufacturing and general industries excluded the financial sectors. The purpose of this research is to investigate the relationship among CEO compensation, corporate performance and earnings management. Are the relationship between CEO compensation and corporate performance related to each other? Does the PPS (Pay-Performance Sensitivity) will enhance the CEO to manipulate the discretionary Accruals ( DA)? Would they avoid the earning loss to achieve the target of expected earning and manipulate the DA?
The result of this study shows as follows：CEO compensation has positive relationship with accounting-based performance, but negative with marketing-based performance. Not surprisingly, PPS has a great impact on DA, the relationship between PPS and DA are related positively. And furthermore, evidence shows that CEO will manipulate the discretionary accrual to achieve the goal of ideal earnings. Finally, the further evidence shows that CEO has greater incentive to manipulate the discretionary accruals when higher PPS is coupled with loss and earnings decreases.
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