总裁股权激励的投资者定价-外文翻译.docx

Investor pricing of CEO equity incentivesJeff P. Boone Inder K. Khurana K. K. RamanAbstractThe main purpose of this paper is to explore CEO compensation in the form of stock and options.The objective of CEO compensation is to better align CEO-shareholder interests by inducing CEOs to make more optimal (albeit risky) investment decisions. However, recent research suggests that these incentives have a significant down-side (i.e., they motivate executives to manipulate reported earnings and lower information quality). Given the conflict between the positive CEO-shareholder incentive alignment effect and the dysfunctional information quality effect, it is an open empirical question whether CEO equity incentives increase firm value. We examine whether CEO equity incentives are priced in the firm-specific ex ante equity risk premium over the 19922007 time period. Our analysis controls for two potential structural changes over this time period. The first is the 1995 Delaware Supreme Court ruling which increased protection from takeovers (and decreased risk) for Delaware incorporated firms. The second is the 2002 SarbanesOxley Act which impacted corporate risk taking, equity incentives, and earnings management. Collectively, our findings suggest that CEO equity incentives, despite being associated with lower information quality, increase firm value through a cost of equity capital channel. Keywords：CEO equity incentives，Information quality，Cost of equity capital Introduction In this study, we investigate investor pricing of CEO equity incentives for a large sample of US firms over the period 19922007.Because incentives embedded in CEO compensation contracts may be expected to influence policy choices at the firm level, our objective is to examine whether CEO equity incentives influence firm value through a cost of equity capital channel.Prior research (e.g., Jensen et al. 2004; Jensen and Murphy 1990) suggests that equity- based compensation, i.e., CEO compensation in the form of stock and options, provides the CEO a powerful inducement to take actions to increase shareholder value (by investing in more risky but positive net present value projects). Put differently, equity incentives are expected to help mitigate agency costs by aligning the interests of the CEO with those of the shareholders, and otherwise help communicate to investors the important idea that the firms objective is to maximize shareholder wealth (Hall and Murphy 2003). However, recent research contends that equity incentives also have a perverse or dysfunctional downside. In particular, equity-based compensation makes managers more sensitive to the firms stock price, and increases their incentive to manipulate reported earningsi.e., to create the appearance of meeting or beating earnings benchmarks (such as analysts forecasts)in an attempt to bolster the stock price and their personal wealth invested in the firms stock and options (Bergstresser and Philippon 2006; Burns and Kedia 2006; Cheng and Warfield 2005). Stated in another way, CEO equity incentives can have an adverse effect on the quality of reported accounting information. As noted by Bebchuk and Fried (2003) and Jensen et al. (2004), by promoting perverse financial reporting incentives and lowering the quality of accounting information, equity-based compensation can be a source of, rather than a solution for, the agency problem. Despite these arguments about the putative ill effects of equity incentives, equity-based compensation continues to be a salient component of the total pay packages for CEOs. Still, given the conflict between the positive incentive alignment effect and the dysfunctional effect of lower information quality, it is an open empirical question whether CEO equity incentives increase firm value. To our knowledge, prior research provides mixed evidence on this issue. For example, Mehran (1995) examines 19791980 compensation data and finds that equity-based compensation is positively related to the firms Tobins Q. By contrast, Aboody (1996) examines compensation data for a sample of firms for years 1980 through 1990, and finds a negative correlation between the value of outstanding options and the firms share price, suggesting that the dilution effect dominates the options incentive alignment effect. Moreover, both these studies are based on dated (i.e., pre-1991) data. In our study, we examine whether CEO equity incentives are related to the firm-specific ex ante equity risk premium, i.e., the excess of the firms ex ante cost of equity capital over the risk-free interest rate (a metric discussed by Dhaliwal et al. 2006).Consistent with Core and Guay (2002), we measure CEO equity incentives as the sensitivity of the CEOs stock and option portfolio to a 1 percent change in the stock price. Based on a sample of 16,502 firm-year observations over a 16 year period (19922007), we find CEO equity incentives to be negatively related to the firms ex ante equity risk premium, suggesting that the positive incentive alignment effect dominates the dysfunctional effect of lower information quality. In other analysis, we attempt to control for two regulatory (structural) changes that occurred during the 19922007 time period of our study.As pointed out by Daines (2001), regulatory changes can have an impact on firm values and returns as well as the structure of executive compensation. First, Low (2009) finds that following the 95 Delaware Supreme Court ruling that resulted in greater takeover protection, managers reduced firm risk by turning down risk-increasing (albeit positive NPV) projects. In response, firms increased CEO equity incentives to mitigate the risk aversion. Potentially, the impact of the Delaware ruling on managers risk aversion and the follow-up increase in equity incentives (to mitigate the increase in managers risk aversion following the ruling) may have resulted in a structural change in our sample at least for firms incorporated in Delaware. To control for this potential structural impact, we perform our analysis for Delaware incorporated firms for 19962007 separately. Our results suggest that the favorable effect of CEO equity incentives on firm value (as reflected in the lower ex ante equity risk premium) is similar for Delaware firms and other firms.Second, a number of studies (e.g., Cohen et al. 2007, 2008; Li et al. 2008) indicate that the 2002 SarbanesOxley Act (SOX) lowered equity incentives (i.e., reduced the proportion of equity incentives to total compensation post-SOX), reduced managerial risk taking, decreased spending on R&D and capital expenditures, and reduced accruals-based earnings management while increasing real earnings management. Since real earnings management is potentially more difficult for investors to detect than accruals-based earnings management, a possible consequence of SOX could be an increase in agency costs since 2002. To control for the potential structural changes imposed by SOX both in terms of expected returns and the level of equity incentives, we perform our analysis for the pre-SOX and post-SOX time periods separately. For each of the two time periods, our results suggest a favorable effect of CEO equity incentives on firm value (as reflected in the lower ex ante equity risk premium), although the effect appears to be stronger in the post-SOX period.Our study contributes to the literature on the valuation of equity incentives. We provide (to our knowledge) first-time evidence on the relation between CEO equity incentives and the ex ante cost of equity capital. Prior research has focused by and large on the consequences of managerial equity incentives for firm performance (Mehran 1995; Hanlon et al.2003) and risk taking (Rajgopal and Shevlin 2002; Coles et al. 2006; Hanlon et al. 2004) rather than on valuation per se. As noted previously, to our knowledge only two prior studies (Aboody1996 and Mehran 1995, both based on pre-1991 data) have examined the pricing of managerial equity incentives, with mixed results. In our study, we provide evidence on the valuation effects of CEO equity incentives based on more recent (19922007) data. By focusing on more recent data, our findings relate to a growing line of research on the association between equity-based compensation and accounting information quality. Specifically, Coffee (2004) suggests that the $1 million limit on the tax deductibility of cash compensation for senior executives imposed by Congress in 1993 motivated firms to make greater use of equity compensation which, in turn, increased the sensitivity of managers to the firms stock price. Bergstresser and Philippon (2006) and Cheng and Warfield (2005) provide evidence which suggests that equity incentives are positively related to the magnitude of accruals-based earnings management. Similarly, Burns and Kedia (2006) and Efendi et al. (2007) report CEO equity incentives to be positively related to accounting irregularities and the subsequent restatement of previously issued financial statements. Thus, prior research suggests that equity-based compensation has a negative effect on the quality of earnings reported by firms. Consistent with several published empirical studies that support the notion that lower information quality is priced in a higher cost of equity capital (e.g., Bhattacharya et al. 2003; Francis et al. 2005), CEO equity incentives could potentially lower firm value by increasing the firm-specific equity risk premium.As noted previously, we document that CEO equity incentives (despite the associated lower information quality) are related negatively to the firms ex ante equity risk premium, implying that equity incentives increase firm value by lowering the firms cost of equity capital.Thus, our findings suggest that the positive CEO-shareholder incentive alignment effect associated with equity incentives dominates the dysfunctional information quality effect.Since 1992, the Securities and Exchange Commission (SEC) has mandated the public disclosure of executive compensation data to promote informed decision making by investors. Our ndings provide further evidence that these disclosures increase the informativeness of stock prices in competitive securities markets. Collectively, given that CEO compensation is a topic of ongoing interest (Jensen et al. 2004; Reich 2007), our ndings indicate that CEO equity incentives inuence rm value favorably through a cost of equity capital channel.Concluding remarksPrior research (e.g., Goldman and Slezak 2006; Jensen et al. 2004) suggests that CEO equity incentives can be a double-edged sword. On the one hand, these incentives can mitigate the agency problem by aligning the interests of the CEO with those of the shareholders (i.e., by inducing CEOs to prefer more optimal, albeit risky, investment choices). On the other hand, these incentives can lead to excessive sensitivity to share price performance and induce executives to manipulate reported earnings with an eye on the stock price. In other words, by promoting perverse reporting incentives and lowering the quality of accounting information pertinent to investor pricing decisions, CEO equity incentives can potentially be a part of, not a remedy for, the agency problem. However, to our knowledge there is little to no prior evidence to suggest which effectthe positive incentive alignment effect or the perverse information quality effectdominates. We contribute to the literature in several ways. First, we show that CEO equity incentives are negatively related to the firm-specific equity risk premium, i.e., the positive incentive alignment effect associated with these incentives dominates the dysfunctional information quality effect in the pricing of the firm-specific ex ante equity risk premium. Second, since equity incentives are intended to induce CEOs to make more optimal (albeit risky) investment decisions, the effect of these incentives on shareholder wealth in the post-SOX time period is of particular interest. Our results suggest that the economic significance of these incentives (i.e., the payoff for shareholders in terms of a lower ex ante equity risk premium and a higher firm value) was in fact higher in the post-SOX time period. Finally, our findings provide further evidence that the SEC mandated disclosures (since 1992) of executive compensation data increases the informativeness of stock prices with respect to the potential implications of CEO equity incentives for the cost of equity capital and firm value. At this time, CEO compensation is a topic of ongoing interest for regulators and investors (Jensen et al. 2004; Reich 2007). Collectively, our findings complement and extend prior research on equity incentives. They are potentially useful in better informing regulators and investors faced with questions about the possible consequences of CEO equity incentives for shareholder wealth.总裁股权激励的投资者定价Jeff P. Boone Inder K. Khurana K. K. Raman摘 要本论文的主要目的是探讨首席执行官以股票和期权形式的报酬问题。首席执行官报酬调整的目的是通过优化调整首席执行官作为股东的利益，使首席执行官做出更多的投资决策（尽管有风险）。然而，最近的研究表明，这些激励措施有重大弊端（例如，他们鼓动高管操纵对外公开的业绩，降低会计信息质量）。鉴于积极的总裁股权激励效应和不良的信息质量效果之间的冲突，“CEO股权激励是否增加公司价值”便成了一个开放的实证问题的。我们看看，在1992年至2007年间，总裁股权激励是否在公司发生特定事前，其定价高于股票风险溢价。在这一时期，我们的分析控制在两个潜在的结构变化之中。首先是1995年美国特拉华州最高法院的裁决，它增加了在美国特拉华州注册成立的公司在收购方面的保护（降低风险）。第二个是2002年颁布的萨班斯-奥克斯利法案，它影响着企业风险的承担，股权激励和盈余管理。总的来说，我们的研究结果表明，总裁的股权激励尽管是低信息质量的，但是它通过调整股权资本成本，提高了公司的价值。关键词：总裁股权激励，信息质量，股权资本成本介 绍在这项研究中，在这项研究中，我们通过调研美国企业在1992年至2007年期间的一个庞大的样本，调查了美国企业对总裁股权激励的投资者定价。因为首席执行官的薪酬激励是要嵌入到他们的薪酬补偿合同中的，因此预期可能影响在企业层面的政策选择。我们的目标是，审查总裁股权激励是否会通过股权资本成本这一渠道，从而影响公司价值。以前的研究（例如，延森等人在2004年的研究;詹森和墨菲在1990年的研究）认为，基于股权的补偿，即以股票和期权的形式的总裁薪酬补偿，为首席执行官提供了强大的动力，诱导他们采取行动，提高股东利益（通过投资更多的风险大，但净现值高的项目这种方式）。换句话说，股权激励制度将有助于通过调整总裁与其他股东的利益，减少代理成本，除此之外，还有助于与投资者沟通，向他们阐述公司的目标是股东财富最大化这一重要理念（霍尔和墨菲在2003的研究）。然而，最近的研究声称，股权激励也有倒行逆施的一面，或者说，也有不良的弊端。特别是，以股权激励为基础的薪酬补偿，使管理人员对该公司的股票价格更敏感，并可能为了提高他们的收益而去操纵公布的业绩，例如创建名义会议或歪曲收益基准（如分析师的预测），企图提高股票价格，以及他们的个人财富投资于该公司的股票和期权（博格斯和菲利在2006年的研究；伯恩斯和凯迪亚 2006年的研究，程沃菲尔德在2005年的研究）。换句话说，总裁股权激励可以对公开列报的会计信息的质量产生负面影响。正如别布丘克和弗瑞得（2003）和詹森等人（2004）所指出的那样，通过助长不正当的财务报告激励措施和降低会计信息的质量，以股权为基础的薪酬制度是产生代理问题的来源，而不是一种解决方案。尽管存在由股权激励而推断出的这些不良影响，以股权为基础的薪酬制度仍然在总裁们的薪酬总额占重要份额。不过，考虑到积极的总裁股权激励效应和不良的会计信息质量效果之间的冲突，总裁股权激励制度是否能增加公司价值，成为一个开放的实证问题。据我们所知，以前的研究提供了有关该问题的不同方面的证据。例如，迈赫兰（1995）研究1979年至1980年的薪酬数据，并认为股权报酬与公司的托宾Q指数呈正相关。与此相反，阿布德（1996）研究了某公司从1980年到1990年有关薪酬的样本数据，并发现尚未行使购股权价值和公司的股价呈负相关。这表明稀释效应在股票期权激励效果中占主导地位。此外，这两个研究都基于以前（即1991年之前）的数据。 在我们的研究中，我们研究是否总裁股权激励与该公司特定的事前股权风险溢价，即该公司超额的事前无风险利率权益资本（达利瓦等人在2006年研究的一种度量）有关。与考尔和瓜伊（2002）一致，我们计算总裁股权激励在股票和期权的投资组合中，股票价格每变动百分之一的敏感性。以某公司观察期超过16年（1992-2007）的样本为基础，我们发现总裁股权激励与公司的事前股权风险溢价呈负相关，这由此表明了积极的股权激励效果主导了较低的信息质量这一不良影响。在其他的分析中，我们试图控制为两个常规（结构方面）的变化，这些变化在我们1992年至2007年的研究期间发生过。正如戴恩斯（2001）指出的那样，结构变化可能对公司价值、回报，以及行政补偿的结构有影响。首先，劳尔（2009）发现，继1995年特拉华州最高法院的裁决造成了更大的收购保护以来，经理用拒绝高风险的投资项目（虽然净现值是正的）这种方式来降低公司的风险。