000			01759nam a22002177a 4500
005			20231025170055.0
008			231025b ph ||||| |||| 00| 0 eng d
022			_a2380-2146
040			_cOCT
100			_aLiu, Hanni
240			_aJournal of Financial Reporting / _hSpring 2023
245			_aAlignment between compensation-contracting and value-relevance roles of renenues / _cHanni Liu, Anup Srivastava, & Jennifer Yin
260			_aLakewood Ranch, FL : _bAmerican Accounting Association, _c2023
300			_aVol 8(1) : pages 63-96
505			_aABSTRACT : Revenue is the closest proxy in financial statement for market size and dominance, factors that determine the survival and future profits of modern corporations. Hence, revenue may contain value-relevant information, incremental to information contained in earnings. We find that revenue is used as a performance metric in executive compensation contracts when it provides information on equity valuation beyond the information provided by earnings. We call this occurrence an alignment between revenues contracting and the valuation roles. The alignment is higher for firms in newer industries, with investors who focus on revenue targets, with managers who provide revenue guidance, and with analysts who issue revenue forecasts. This alignment seems efficient because revenue is more informative of future profits when it carries higher weight in executive compensation contracts. We conclude that modern corporations increasingly incentivize managers to create new markets and defend existing market shares, in addition to maximizing current profits.
650			_aRevenue
650			_aValue relevance
700			_aSrivastava, Anup
700			_aYin, Jennifer
942			_2ddc _cCR _n0
999			_c9279 _d9279