Discretionary disclosure and stock-based incentives

Venky Nagar, Dhananjay Nanda, Peter Wysocki

Research output: Contribution to journalArticlepeer-review

277 Scopus citations


We examine the relation between managers' disclosure activities and their stock price-based incentives. Managers are privy to information that investors demand and are reluctant to publicly disseminate it unless provided appropriate incentives. We argue that stock price-based incentives in the form of stock-based compensation and share ownership mitigate this disclosure agency problem. Consistent with this prediction, we find that firms' disclosures, measured both by management earnings forecast frequency and analysts' subjective ratings of disclosure practice, are positively related to the proportion of CEO compensation affected by stock price and the value of shares held by the CEO.

Original languageEnglish (US)
Pages (from-to)283-309
Number of pages27
JournalJournal of Accounting and Economics
Issue number1-3
StatePublished - Jan 2003
Externally publishedYes


  • Discretionary disclosure
  • Incentive
  • Share ownership
  • Stock compensation

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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