Management Compensation, Insider Trading and Lobbying Choice: The Case of R & D

Ehsan Feroz and Robert L. Hagerman
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Robert L. Hagerman: Professor of Accounting and Finance, State University of New York at Buffalo.

Australian Journal of Management, 1990, vol. 15, issue 2, 297-314

Abstract: In this study we examine the consistency between lobbying choices and insider trading behaviour by managers before and after the issuance of the 1974 FASB Exposure Draft on R&D. The results, though not very strong, indicate that managers compensated by accounting-based schemes lobbied against the FASB 1974 Exposure Draft on R&D and sold the shares of their firms, while managers compensated by market-based schemes lobbied for and bought shares of their firms. These results provide additional evidence that managers' lobbying choice can act as a surrogate for their beliefs as reflected in their insider trading behaviour.

Keywords: MANAGEMENT COMPENSATION; INSIDER TRADING; LOBBYING; FASB; R & D (search for similar items in EconPapers)
Date: 1990
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:15:y:1990:i:2:p:297-314

DOI: 10.1177/031289629001500205

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