Columbus Business Daily

Tell how management compensation relates to earnings management?

Public Comments

1. It doesn't. In an ideal world, one would think that managers who generate earnings would be compensated accordingly. But, there are times when earnings are not the objective of the company. Perhaps the company is looking to expand market share, for example. During this period, the earnings may not be very lucrative and the balance sheet expands, but it may be necessary to grow the business organically.
2. lol...doesn't seem to apply for CEOs.