...Xiumin Martin; Hojun Seo; Jun Yang; Daniel Sungyeon Kim; Jordan Martel ABSTRACT We study how corporate boards set earnings performance targets in CEOs’ annual incentive plans (AIPs) and the implications for strategic management earning guidance. We find that corporate boards rely on management...

... in this study are publicly available. performance targets target difficulty incentives A wealth of prior research examines the effect of target difficulty on performance in various settings ( Bonner and Sprinkle 2002 ; Locke and Latham 2002 ). Despite recent interest in how firms set performance...

...Jasmijn C. Bol; Jeremy B. Lill ABSTRACT In this study, we examine a setting where principals use past performance to annually revise performance targets, but do not fully incorporate the past performance information in their target revisions. We argue that this situation is driven by some...

... for performance evaluation and compensation ( Maher, Stickney, and Weil 2007 ; Merchant and Van der Stede 2012 ). Although performance targets play an important role in managing organizations, evidence on how firms set performance targets and revise them over time is scant because researchers rarely have access...