This study examines the effects of executive compensation structures and research and development (R&D) reporting methods on subordinate managers’ psychophysiological responses and decisions to engage in real earnings management. Results from one 2 × 2 between-participants experiment indicate that when R&D expenditures are capitalized, relative to expensed, managers are less willing to abandon a failing project in favor of a superior project. Importantly, executive compensation structures can effectively reduce this form of real earnings management by subordinates. When executives are paid with restricted stock, relative to when executives are compensated with unrestricted stock, their subordinate managers are less willing to continue a failing R&D project when R&D expenses are capitalized. A second experiment that employs pupillometry, eye tracking and facial analysis in order to capture participants’ psychophysiological responses to incentive structures reveals that subordinates exhibit increased arousal and more intense negative emotions when they encounter supervisor pay structures that conflict with their personal incentives. Increases in negative emotion lead to reductions in earnings management behavior. The results indicate that compensation structures for superiors, such as executives, can significantly mitigate subordinate managers’ tendency to engage in real earnings management. In addition, from a methodological perspective, the second experiment indicates that hypothetical incentives are internalized by experiment participants, and hypothetical incentives lead to predictable psychophysiological responses and related decisions.

本研究探讨了高管薪酬结构和研究与开发（R＆D）报告方法对下级经理进行实际盈余管理的心理生理反应和决策的影响。一项2×2参与者间实验的结果表明，相对于支出，将研发支出资本化时，管理人员更不愿意放弃失败的项目，而转向上级项目。重要的是，高管薪酬结构可以有效地减少下属的这种实际盈余管理形式。当高管人员获得限制性股票的报酬时，相对于高管人员获得非限制性股票的报酬而言，当研发费用资本化时，其下级经理就不愿继续失败的研发项目。第二项利用瞳孔测量，眼动追踪和面部分析以捕获参与者对激励结构的心理生理反应的实验表明，当下属遇到与其个人激励相冲突的主管薪酬结构时，他们会表现出越来越高的唤醒力和更强烈的负面情绪。负面情绪的增加导致收益管理行为的减少。结果表明，高管（例如高管）的薪酬结构可以显着减轻下级经理从事实际盈余管理的趋势。此外，从方法论的角度来看，第二个实验表明假设的动机是由实验参与者内部化的，