Gender differences in compensation and earnings management: Evidence from Australian CFOs

Lien Duong and John Evans

Pacific-Basin Finance Journal, 2016, vol. 40, issue PA, 17-35

Abstract: We investigate the impact of CFO gender on CFO compensation and earnings management in Australia. In a sample of exchange-listed firms from 2006 to 2010, we find a significant gender pay gap in CFO compensation but much of this pay gap dissipates when female CFOs are matched using a propensity scoring method. Female CFOs tend to choose less risky remuneration packages with more cash and less non-cash component, with more salary and less bonus than their male peers. In addition, female CFOs are more conservative and deliver higher reporting quality compared to male CFOs. They engage substantially less in both accruals-based and real-based earnings management than their male counterparts. The difference in behavior of earnings management and in the selected compensation structures between male and female CFOs can be possibly explained by the gender-based difference in personal risk preference.

Keywords: Chief Financial Officers; Executive compensation; Gender pay gap; Earnings management; Risk aversion; Australia (search for similar items in EconPapers)
JEL-codes: G34 J33 M41 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:40:y:2016:i:pa:p:17-35

DOI: 10.1016/j.pacfin.2016.07.004

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