Smooth Earning, Annual Compensation and CEO Characteristics

Lanouar Charfeddine, Wided Bouaine, Housine Smida


The systems of compensation remain the main mean to reduce the conflicts of interests between chiefs executives officers (CEOs) and the shareholders. The CEOs  compensation is supposed to be positively correlated with the performance of the company. Consequently, the CEOs can managed profits to   determine their level of compensation or to increase the part of cash  and/or options in compensation. This paper investigates the relationship between the discretionary accruals and annual compensation, current performance, future performance, level of debts and total of assets by using a panel data analysis.


Empirical results show that the CEO smoothes results of the company in order to have an evolutionary compensation. Moreover, we showed that the tenure and the proportion of property increase the opportunities of this smoothing and decreases the opportunism of the CEOs as soon as they are rooted.

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Copyright (c) 2011 Lanouar Charfeddine, Wided Bouaine, Housine Smida

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International Journal of Accounting and Financial Reporting  ISSN 2162-3082

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