Date of Award


Degree Name

Doctor of Philosophy




Erik Devos


This doctoral dissertation examines the effect of an exogenous event on Executive compensation and the relationship between executive compensation and earnings management undertaken by the firm.

My first essay presents evidence that natural disasters have an effect on CEO compensation. Our main findings are that option compensation is lower for CEOs in counties where a natural disaster occurred. Furthermore, in the year of the disaster, stock compensation is higher among CEOs in natural disaster counties when compared to those in non-disaster counties. When considering liquidity, option compensation levels are lower for firms with below average liquidity levels but stock compensation is higher for firms with above average liquidity levels. This suggests that the occurrence of natural disasters and liquidity positions of firms, which experienced natural disasters, have an effect on the type and level of compensation a CEO receives.

My second essay shows that Chief Financial Officers pay-for-performance sensitivity (Delta) is negatively associated with a firm's probability of engaging in real earnings management. Furthermore, it is also negatively associated with the levels of earnings inflating abnormal discretionary expenses, abnormal cash flows and abnormal production costs. This is even the case when the sample is restricted to those firms who are likely to have used real earnings management to reach earnings benchmarks. This suggests that the pay-for-performance of the Chief Financial Officer is not the primary factor driving firm real earnings management.




Received from ProQuest

File Size

86 pages

File Format


Rights Holder

Michael Abrokwah