Erickson, Heitzman, and Zhangs (2013) results indicate that firms engage in tax-motivated loss recognition to offset previously recorded income. Since tax and financial income by design is linked (Guenther, Maydew, and Nutter 1997), net operating loss reporting can impose significant costs on CEOs who have to recognize similar losses for financial reporting purposes. As a result, firms must motivate the CEO to accelerate loss recognition if the firm expects to benefit from the cash inflows generated by the tax refund. In the current study, I examine whether CEO cash-based compensation increases to offset the potential negative costs that can arise due to NOL reporting. Counter to ex-ante predictions, the results do not indicate that CEO cash-based compensation increases surrounding NOL reporting. The lack of cash-based compensation increase is consistent with NOL reporting arising from poor financial performance, rather than tax-motivated loss recognition.
| Identifer | oai:union.ndltd.org:LSU/oai:etd.lsu.edu:etd-01192016-135349 |
| Date | 16 February 2016 |
| Creators | Sun, Pei-Yu |
| Contributors | Reichelt, Ken J., Crumbley, D. Larry, Cheng, Christine C. |
| Publisher | LSU |
| Source Sets | Louisiana State University |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lsu.edu/docs/available/etd-01192016-135349/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached herein a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to LSU or its agents the non-exclusive license to archive and make accessible, under the conditions specified below and in appropriate University policies, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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