ReviewCampbell systematic reviews2023
Does chief executive compensation predict financial performance or inaccurate financial reporting in listed companies: A systematic review.
Review in Campbell systematic reviews, 2023. The graph could read no effect estimate from its abstract, so it casts no vote on the map. Cited by 2 papers.
What it found
Each row is one number read from the abstract, on the scale the paper reported it, with its interval. Left of the dashed line favours the treatment, right favours the comparator. Under each row is the sentence it came from. New to these charts? A ten-minute tutorial.
The abstract states no effect estimate the extractor could read, or names no intervention and outcome on the map, so this paper lights no cell and moves no belief. It is still indexed, cited and linked below.
The trial behind it
Trials whose registry record cites this paper, or whose number appears in the abstract. A trial that started after this paper was published is citing it as background, not reporting it.
Neither the registry nor the abstract names a trial number. If this is a trial report, that itself is worth knowing.
Who cites it
2 citing papers in PubMed.
- PROTOCOL: Is the CEO/employee pay ratio related to firm performance in publicly traded companies?Campbell systematic reviews · 2024Article
- Does chief executive compensation predict financial performance or inaccurate financial reporting in listed companies: A systematic review.Campbell systematic reviews · 2023Review
Corrections and comments
- Update of
Authors and funding
6 authors.
Funding
No grant is acknowledged in the PubMed record.
Abstract
Background: Financial incentives for chief executive officers (CEOs) are thought to motivate them to lead their company toward achieving important business objectives. Based on the Rousseau et al. (2019) protocol, this systematic review assesses the predictive effects of CEO incentives on certain business outcomes. Objectives: This review addresses whether CEO financial incentives predict: (1) firm financial performance and (2) financial restatement due to misreporting. Search methods: We searched nine research databases for published peer-reviewed literature (to July 23-26, 2021 and an attenuated search from those dates to July 27-31, 2023) and thirteen professional association websites for non-published gray literature (to August 2021). We also hand-searched selected relevant journals. Selection criteria: We reviewed peer-reviewed and unpublished studies available in English since 1980. Eligible studies regarding our first question assessed CEO financial incentives (1) 1 year or more before the measurement of outcomes, (2) controlled for pre-incentive firm performance or market conditions, and (3) analyzed CEO financial incentives as predictors of firm outcomes. Eligible studies regarding our second question assessed whether financial restatement had occurred and analyzed effects of CEO incentives on this outcome. Data collection and analysis: We extracted standardized regression coefficients for each effect or converted unstandardized regressions to standardized. Analyses were conducted using STATA. All studies were assessed to have moderate risk of bias. Main results: For our first question, 20 studies (15,398 firms) met our criteria for meta-analysis of effects. Bonuses, the most commonly studied incentive, had a small positive effect on next year's accounting performance metric Return on Assets (ROA, 0.046 [ Authors' conclusions: This review affirms a small effect of CEO Bonuses, but no effect of Stock Options, on the accounting performance metric ROA. In contrast, neither Bonuses nor Stock Options predict a firm's market-related metrics. CEO incentives also are unrelated to Financial Restatement. Despite widespread use of CEO financial incentives, lack of evidence supporting their use, beyond the bonus-ROA effect we identify, suggests caution regarding current CEO financial incentive practice and greater consideration of alternative arrangements to enhance firm performance.
Identifiers
What OpenQuestion holds
Registered trials
Read under generation 80e0d062 · epoch 390. Bibliography from PubMed, PubMed Central and OpenAlex; grants from NIH RePORTER; trial links from ClinicalTrials.gov; estimates, votes and beliefs from the OpenQuestion graph.