Are CEOs incentivized to shelter good information?

Prior theoretical studies on the agency problem hold different opinions from the empirical literature on two questions: (a) Are CEOs incentivized to shelter good information? (b) Are CEOs incentivized to evenly shelter good and bad information? This paper demonstrates that CEOs with high pay-performance incentives tend to successfully shelter good information rather than bad information. Furthermore, CEOs with high pay-performance incentives shelter good information by using real earnings management and textual manipulation but not accrual-based earnings management. These asymmetric information manipulation behaviors help to decrease corporate cash flow volatility as well as the jump and crash risk on the stock market.