In the Sixties, the qualified stock option was the predominant form of long-term incentive compensation contract for major industrial firms in the U.S. In the early Seventies these same firms replaced their tax-qualified stock option plans with non-qualified sttock options and later modified these plans to include a variety of new contingent compensation arrangements, some of which were based on accounting numbers instead of stock prices. This paper develops the hypothesis that tax considerations play an important role in explaining the form of compensation contracts. The pattern and timing of changes in the compensation plans of the top 100 industrial firms provides evidence consistent with the tax hypothesis.

Demand for money; Econometric models

William R. Kinney, Jr., Gerald L. Salamon, Regression Analysis in Auditing: A Comparison of Alternative Investigation Rules, Journal of Accounting Research, Vol. 20, No. 2, Part I (Autumn, 1982), pp. 350-366

Corrective actions, Multiple cost processes system, Internal control, Cost variance

This paper examines the relationship between the ownership control status of firms and the accounting methods they adopt. The arguments of Watts and Zimmerman's positive theory are integrated with those of managerial economists to generate the prediction that management controlled firms are more likely than owner controlled firms to adopt accounting methods which increase reported earnings. This prediction is inconsistent with Fama's hypothesis that the market for managerial talent will prevent management controlled firms from acting differently than owner controlled firms. This paper compares the depreciation methods used by a sample of management and owner controlled firms for financial reporting purposes. The comparison considers and controls for the factors of firm size, leverage, and the depreciation method used for tax reporting purposes. The comparison reveals that there is a significant difference in the depreciation methods adopted by management controlled and owner controlled firms for financial reporting purposes.

Journal Article A Note on the Stability Limitations in “A Stable Price Adjustment Process” Get access Conway L. Lackman Conway L. Lackman Administrative Studies, Newark Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 97, Issue 3, August 1982, Pages 541–542, https://doi.org/10.2307/1885877 Published: 01 August 1982

Welch and Moses Abramovitz and two referees for help at various stages of our work. This survey represents a substantial revision of work originally supported by the Minimum Wage Study Commission.

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