Board Member Remuneration and Earnings Management: The Case of Portugal
This study draws on agency theory and evaluates the effect of the remuneration structures of board members on earnings management, proxied by discretionary accruals. To achieve the objective, this study uses a multiple regression model and a hand-collected dataset of Portuguese-listed firms from 201...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2024-01-01
|
| Series: | Administrative Sciences |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2076-3387/14/1/20 |
| _version_ | 1827372996215439360 |
|---|---|
| author | Catarina Gonçalves Dias Inna Choban de Sousa Paiva Luísa Cagica Carvalho |
| author_facet | Catarina Gonçalves Dias Inna Choban de Sousa Paiva Luísa Cagica Carvalho |
| author_sort | Catarina Gonçalves Dias |
| collection | DOAJ |
| description | This study draws on agency theory and evaluates the effect of the remuneration structures of board members on earnings management, proxied by discretionary accruals. To achieve the objective, this study uses a multiple regression model and a hand-collected dataset of Portuguese-listed firms from 2015 to 2019. This study suggests that fixed board remuneration is associated with lower levels of earnings management, as opposed to variable remuneration of board members, which is strongly associated with a higher level of earnings management. The findings based on this study provide useful information to investors and regulators in evaluating the effect of board compensation structure on earnings management. Additionally, this study expands the corporate governance literature by examining an under-researched mechanism to address the agency problem. |
| first_indexed | 2024-03-08T11:09:40Z |
| format | Article |
| id | doaj.art-b6e94b2507ba4c80b7a32b045ce504e2 |
| institution | Directory Open Access Journal |
| issn | 2076-3387 |
| language | English |
| last_indexed | 2024-03-08T11:09:40Z |
| publishDate | 2024-01-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Administrative Sciences |
| spelling | doaj.art-b6e94b2507ba4c80b7a32b045ce504e22024-01-26T14:11:25ZengMDPI AGAdministrative Sciences2076-33872024-01-011412010.3390/admsci14010020Board Member Remuneration and Earnings Management: The Case of PortugalCatarina Gonçalves Dias0Inna Choban de Sousa Paiva1Luísa Cagica Carvalho2Accounting Department, Instituto Universitario de Lisboa (ISCTE-IUL), 1649-026 Lisboa, PortugalAccounting Department, Instituto Universitario de Lisboa (ISCTE-IUL), 1649-026 Lisboa, PortugalInstituto Politécnico de Setúbal, Escola Superior de Ciências Empresariais, Resilience, 2914-503 Setúbal, PortugalThis study draws on agency theory and evaluates the effect of the remuneration structures of board members on earnings management, proxied by discretionary accruals. To achieve the objective, this study uses a multiple regression model and a hand-collected dataset of Portuguese-listed firms from 2015 to 2019. This study suggests that fixed board remuneration is associated with lower levels of earnings management, as opposed to variable remuneration of board members, which is strongly associated with a higher level of earnings management. The findings based on this study provide useful information to investors and regulators in evaluating the effect of board compensation structure on earnings management. Additionally, this study expands the corporate governance literature by examining an under-researched mechanism to address the agency problem.https://www.mdpi.com/2076-3387/14/1/20agency theoryearnings managementPortugalremuneration structureboard of directors |
| spellingShingle | Catarina Gonçalves Dias Inna Choban de Sousa Paiva Luísa Cagica Carvalho Board Member Remuneration and Earnings Management: The Case of Portugal Administrative Sciences agency theory earnings management Portugal remuneration structure board of directors |
| title | Board Member Remuneration and Earnings Management: The Case of Portugal |
| title_full | Board Member Remuneration and Earnings Management: The Case of Portugal |
| title_fullStr | Board Member Remuneration and Earnings Management: The Case of Portugal |
| title_full_unstemmed | Board Member Remuneration and Earnings Management: The Case of Portugal |
| title_short | Board Member Remuneration and Earnings Management: The Case of Portugal |
| title_sort | board member remuneration and earnings management the case of portugal |
| topic | agency theory earnings management Portugal remuneration structure board of directors |
| url | https://www.mdpi.com/2076-3387/14/1/20 |
| work_keys_str_mv | AT catarinagoncalvesdias boardmemberremunerationandearningsmanagementthecaseofportugal AT innachobandesousapaiva boardmemberremunerationandearningsmanagementthecaseofportugal AT luisacagicacarvalho boardmemberremunerationandearningsmanagementthecaseofportugal |