Impact of Accounting Comparability according to the Peer Firms on Board Compensation

Document Type : Original Article

Authors

1 Corresponding Author: PH.D Candidate in Accountancy, Imam Khomeini International University, Qazvin, Iran

2 Full Professor, Department of Accountancy, Imam Khomeini International University, Qazvin, Iran

3 Assistant Professor, Department of Accountancy, Imam Khomeini International University, Qazvin, Iran

Abstract

The firms employ the accounting information comparability between firm peers, will determine board compensation through performance evaluation. Thus, current study is aimed to explore the important role of accounting comparability in board compensation. In line with this, using a panel fractional regression model and mixed data, we examined the data to explore the impact of accounting information comparability on compensation policies, with regard to 117 firms for the period 2009 to 2018 (1170 firm - years) from TSE. The results show that, there is a positive and significantly relationship between accounting information comparability (annual return and cash flow from operations proxies) and board compensation. Thus, it was concluded that higher accounting information comparability level leads more than board compensation. Furthermore, the findings of this study suggest that the application of board compensation policies theories and the new fractional regression model calls for more inquiry with regard to three accounting comparability proxies. The present study was an attempt to develop the literature related to the factors affecting managers' rewards by using three criteria to calculate comparability and fractional pattern.

Keywords

References

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Budget and Finance Strategic Research
Volume 2, Issue 2 - Serial Number 6
Summer Quarterly
September 2021
Pages 11-49

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History

  • Receive Date: 14 September 2021
  • Revise Date: 17 October 2021
  • Accept Date: 20 October 2021

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