Jonathan Bonham studies the effect of accounting rules on the actions taken by managers and employees when their compensation is tied to accounting-based performance measures. For example, his dissertation demonstrates that measurement error in accounting estimates leads to actions with less upside and more downside risk and to compensation contracts exhibiting bonus caps and floors. His research interests also include relative performance evaluation, the relationship between voluntary and mandatory disclosure, and the properties of accounting systems designed to meet the needs of various users.
Bonham earned a PhD in Accounting from Rice University as part of its accounting doctoral program’s inaugural graduating class. He also holds a Master of Accountancy, BS in Accounting, and BA in Economics all from Brigham Young University. Bonham teaches financial accounting in Booth’s MBA program.
Outside of research and teaching, Bonham enjoys exercise, swing dancing, and spending time with his wife and kids.
2018 - 2019 Course Schedule
REVISION: Does It Pay to 'Be Like Mike'? Aspirational Peer Firms and Relative Performance Evaluation
We examine the manner and extent to which firms evaluate performance relative to aspirational peer firms. Guided by the predictions of an agency model, we find that CEO compensation increases in the correlation between own and aspirational peer firm performances. In addition, we define and test conditions where aggregate peer performance, which has been the primary focus of prior relative performance evaluation studies of competitive peers, is expected to have an association with CEO compensation. These conditions are supported by our empirical results. Finally, we document that our results are more pronounced when the firm-peer relationship is one-way and the peer firm is in a different industry and therefore is more aspirational.