Do aircraft perquisites cause CEOs to withhold bad news?

Chia-Wei Huang and Chih-Yen Lin

The North American Journal of Economics and Finance, 2016, vol. 35, issue C, 189-202

Abstract: This paper explores the relation between management forecasts and expensive perquisites. We investigate Yermack's (2006) conjecture that managers withhold bad news in order to receive expensive perquisites. We provide direct evidence supporting Yermack's (2006) conjecture. The frequency and magnitude of bad news release is greater than that of good news after the chief executive officer (CEO) first discloses aircraft perks. In addition, managers with greater numbers of disclosed perks are more inclined to withhold bad news. Additional subsample analyses provide further support for managerial bad news withholding behavior.

Keywords: Executive compensation; Perquisites; Corporate jets; Management forecasts (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:35:y:2016:i:c:p:189-202

DOI: 10.1016/j.najef.2015.10.009

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