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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/25998
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| Title: | Trading incentives to meet the analyst forecast |
| Authors: | McVay, Sarah
Nagar, Venky
Wei Tang, Vicki |
| Keywords: | Analyst forecasts
Earnings
Managerial compensation
Insider trading
Corporate governance |
| Issue Date: | 2006 |
| Series/Report no.: | CLB-06-025 |
| Abstract: | We examine stock sales as a managerial incentive to help explain the
discontinuity around the analyst forecast benchmark. We find that the
likelihood of just meeting versus just missing the analyst forecast is
strongly associated with subsequent managerial stock sales. Moreover, we
provide evidence that managers manage earnings prior to just meeting the
threshold and selling their shares. Finally, the relation between just
meeting and subsequently selling shares does not hold for non-manager
insiders, who arguably cannot affect the earnings outcome, and is weaker
in the presence of an independent board, suggesting that good corporate
governance mitigates this strategic behavior. |
| URI: | http://hdl.handle.net/2451/25998 |
| Appears in Collections: | NYU Pollack Center for Law & Business Working Papers
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