Summary: | 碩士 === 國立中央大學 === 會計研究所 === 102 === We provide evidences on the relationship between the performance-related compensation and accounting conservatism. Our results do support that using more option compensations would decrease the accounting conservatism. On the contrary, company using more restricted stocks would have higher accounting conservatism. The main reason leading to the result is the profit curve of options and restricted stocks. For the options, the profit curve has no limit on the top. Manager has more incentives to raise the stock price. We found that using more option compensation would increase the accounting conservatism before the implement of FAS123-R. However, after the implement of FAS123-R, using more option compensation would decrease the accounting conservatism. The implement of FAS123-R significantly reduce the incentives of earnings for using option evaluated by intrinsic value methods. Since both option and restricted compensation evaluated by fair value methods, the effect of performance-related compensation on accounting conservatism would mainly lead by the profit curve. We provide the suggestion on the compensation design. Company should consider the accounting conservatism and the feature of different compensation into the consideration when establishing the regulation of compensation.
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