Taxes and the Use of Subjectivity in Executive Bonus Plans

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dc.contributor.advisorWilson, Ryan
dc.contributor.authorFox, Zackery
dc.date.accessioned2021-09-13T18:35:19Z
dc.date.available2021-09-13T18:35:19Z
dc.date.issued2021-09-13
dc.description.abstractIn this study, I examine whether taxes influence the design of executive compensation incentives. Recently, the Tax Cuts and Jobs Act (TCJA) removed the requirement that bonus plans be tied to objective and verifiable performance measures for the bonus to be tax deductible. A potential consequence of this removal is that firms will begin to rely more heavily on subjectivity and discretion in their bonus arrangements. I find an increase, post-TCJA, in both the number of and the weight applied to performance measures with discretionary criteria. Using various cross-sectional analyses, I further connect my findings to taxes and find that the effect I document is concentrated among firms with a greater sensitivity to the loss of a tax deduction from the TCJA. Overall, the results suggest that the recent tax reform influenced the design of executive bonus plans by facilitating the inclusion of additional subjective performance measures.en_US
dc.identifier.urihttps://hdl.handle.net/1794/26621
dc.language.isoen_US
dc.publisherUniversity of Oregon
dc.rightsAll Rights Reserved.
dc.subjectbonus plansen_US
dc.subjectdiscretionen_US
dc.subjectexecutive compensationen_US
dc.subjectSubjective performance measuresen_US
dc.subjectsubjectivityen_US
dc.subjecttax policyen_US
dc.titleTaxes and the Use of Subjectivity in Executive Bonus Plans
dc.typeElectronic Thesis or Dissertation
thesis.degree.disciplineDepartment of Accounting
thesis.degree.grantorUniversity of Oregon
thesis.degree.leveldoctoral
thesis.degree.namePh.D.

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