What incentives do managers face that might give rise to inefficient investments in leases? If managers make inefficient investments in leases, what economic consequences arise for those managers and their firms? We develop a model of expected investments in leased assets and use the residuals from the model as proxies for inefficient investments. We find that, in contrast to investments in capital expenditures, leasing appears to be a mechanism through which managers can seemingly over-invest, even among firms with high quality financial reporting and negative free cash flows. Examining economic consequences, we predict and find that unexpected investments in leased assets trigger increasing future sales growth but declining future earnings growth for as long as three years ahead. We also find a negative relation with contemporaneous stock returns, suggesting investors view unexpected investments in leases as value destructive. Finally, despite negative returns consequences, we find that unexpected investments in leases are associated with higher CEO compensation driven primarily by future sales growth. Our study suggests that compensation contracts that reward growth may give managers’ incentives to drive sales growth with larger-than-expected investments in leased assets, which lead to slower future earnings growth and negative share price consequences for investors. Our results should inform managers and board members, investors, and researchers interested in investment efficiency, corporate governance, and leases.

中文翻译：

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经理的投资决策：租赁产生的激励和经济后果

经理面临哪些激励措施可能导致租赁投资效率低下？如果管理者对租赁进行低效的投资，对那些管理者及其公司会产生什么经济后果？我们开发了租赁资产的预期投资模型，并将模型中的残差用作低效投资的代理。我们发现，与资本支出投资相反，租赁似乎是一种机制，通过这种机制，经理即使在财务报告质量高且自由现金流为负的公司中也似乎可以过度投资。考察经济后果，我们预测并发现，对租赁资产的意外投资会导致未来的销售增长，但在未来三年内却会降低未来的收入增长。我们还发现与同期股票收益存在负相关关系，这表明投资者将对租赁的意外投资视为具有破坏性的价值。最后，尽管产生了负收益影响，但我们发现，租赁方面的意外投资与更高的CEO薪酬主要受未来销售增长的推动。我们的研究表明，奖励增长的薪酬合同可能会给经理人提供激励，促使他们以超过预期的租赁资产投资来推动销售增长，从而导致未来收益增长放缓，并对投资者造成负面股价影响。我们的结果应告知对投资效率，公司治理和租赁感兴趣的经理和董事会成员，投资者和研究人员。