Abstract

http://ssrn.com/abstract=1152421
 
 

References (39)



 
 

Citations (19)



 


 



CEO and CFO Career Penalties to Missing Quarterly Analysts Forecasts


Richard Mergenthaler Jr.


University of Iowa - Henry B. Tippie College of Business

Shivaram Rajgopal


Emory University - Goizueta Business School

Suraj Srinivasan


Harvard Business School

August 10, 2012


Abstract:     
This study examines whether the board of directors penalizes CEOs and CFOs in the form of bonus cuts, fewer equity grants, and forced turnover for the act of barely missing the latest consensus analyst forecast and whether such penalties are consistent with efficient contracting or fixation. We find that CEOs are penalized when they just miss the latest consensus analyst forecast via bonus cuts, fewer equity grants, and forced turnover. CFOs are also penalized for just missing the latest consensus analyst forecast via bonus cuts and forced turnover, but do not appear to be penalized with fewer equity grants. Further, we find evidence suggesting that the penalties levied by the board for just missing the latest analyst forecast are more consistent with fixation than efficient contracting.

Number of Pages in PDF File: 42

JEL Classification: G29, J33, G34, M41, M45, G38

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Date posted: June 29, 2008 ; Last revised: August 12, 2012

Suggested Citation

Mergenthaler, Richard and Rajgopal, Shivaram and Srinivasan, Suraj, CEO and CFO Career Penalties to Missing Quarterly Analysts Forecasts (August 10, 2012). Available at SSRN: http://ssrn.com/abstract=1152421 or http://dx.doi.org/10.2139/ssrn.1152421

Contact Information

Richard Dean Mergenthaler Jr.
University of Iowa - Henry B. Tippie College of Business ( email )
108 Pappajohn Business Building
Iowa City, IA 52242-1000
United States
319-335-0848 (Phone)
Shivaram Rajgopal (Contact Author)
Emory University - Goizueta Business School ( email )
1300 Clifton Road
Atlanta, GA 30322-2722
United States
Suraj Srinivasan
Harvard Business School ( email )
Soldiers Field
Boston, MA 02163
United States
HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=pub&facId=10700
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