چکیده:
To create interests alignment between the owner and the manager، accurate index of performance should be usedas the rewarding criterion. One of the important indexes for performance measurement purposes in rewarding plans is the profit sensitivity، so that it can meet all of contract parties’ interests. Those profits carrying sensitivity cancause a change in the value of the company's market. So، the main purpose of this study is to survey the effect of profit sensitivity dimensions (Earnings response coefficient، abnormal returns fluctuations and earning prediction error)on board of directors’ reward. For this purpose، the data related to the Tehran Stock Exchange listed companies (121 companies) for the period from 2008 to 2016 were extracted and the multiple regression was used to test the hypothesis. The results showed that three criteria، namely، earnings response coefficient، adjusted earnings response coefficient and earnings value relevance، have a positive effect on board of director’s rewards، while two criteria، namely، abnormal returns fluctuations and earning prediction error have a negative effect on board of director’s rewards.
خلاصه ماشینی:
Therefore, in the reward system, not only the reported accounting index should be considered as a criterion for rewarding, but based on what is inferred from the theoretical foundations of reward, this performance measurement index must have accuracy and sensitivity in measurement; because low-quality profit causes risk in resource allocation, reduces economic growth through incorrect allocation of capital, diverts resources towards projects with unrealistic returns, and increases information risk (Kordestani & Taifeh, 1392).
Therefore, in the reward system, not only the reported accounting index should be considered as a criterion for rewarding, but based on what is inferred from the theoretical foundations of reward, this performance measurement index must have accuracy and sensitivity in measurement; because low-quality profit causes risk in resource allocation, reduces economic growth through incorrect allocation of capital, diverts resources towards projects with unrealistic returns, and increases information risk (Kordestani & Taifeh, 1392).
Considering that the profit reaction coefficient expresses the market’s reaction to changes in earnings per share and is one of the best ways to assess the quality and reliability of profit (Protti & Wegenhofer, 2011) and interpret the market’s understanding of information transmitted through the announcement and publication of profit (Chris & Summers, 2005) and also has a positive and significant relationship with certainty regarding future dividend profits or future profits (Chambers, Freeman & Koch, 2005), it can be said that a high profit reaction coefficient indicates a direct indicator of the sensitivity of reported profit.
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