Payoffs to Aggressiveness

ABSTRACT For a broad sample of firms, we use structural equations modeling to construct latent variables for real-action aggressiveness and reporting policy aggressiveness. We estimate the association between associations each variable with shareholder payoffs (returns) CEO (annual compensation position). Results show two types are positively correlated but have different consider. Greater policy-choice is associated higher returns compensation; opposite true greater find positive restatement likelihood. Compared nonrestatement abnormal firms aggressive choices larger in pre-restatement period lower post-restatement period. Negative at announcement do not, on average, eliminate long-run (multi-year) or whose results restated. JEL Classifications: M40; M41.