Clawback Provisions In Real Estate Investment Trusts

Abstract

Using a sample of 195 unique real estate investment trusts (REITs), we examine factors related to the adoption of clawback provisions within managerial compensation contracts. In general, we find strong and consistent empirical evidence that clawback provision are directly related to firm size, complexity, leverage, growth options, monitoring incentives, and CEO performance incentives. We also find that clawbacks are associated with enhanced market and accounting performance, with stronger performance relations observed for adoption decisions tied directly to regulatory mandates. In sum, we conclude compensation clawback provisions represent a value-relevant, strategic governance mechanism for REITs.

Publication Date

3-1-2016

Publication Title

Journal of Financial Research

Volume

39

Issue

1

Number of Pages

87-114

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1111/jfir.12090

Socpus ID

84959287757 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/84959287757

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