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The “long term” as an instrument for deploying neoliberalism: the case of the myth of long-term compensation

Terhi Chakhovich (Department of Accounting, Aalto University, Espoo, Finland)

Accounting, Auditing & Accountability Journal

ISSN: 0951-3574

Article publication date: 5 January 2021

Issue publication date: 12 November 2021

460

Abstract

Purpose

This study locates one surprisingly powerful ally of neoliberalism enabling its proliferation in certain contexts, the discursive notion of the “long term” (LT). Earlier literature has shown that neoliberalism is concerned with investors' decision-making that has been claimed to be based on LT forecasts. This research explains this focus on the “long term.”

Design/methodology/approach

Share-based compensation (SBC) is investigated in one case company. The data consist of interviews with executives, board members, analysts and owners and also of archival data on the executives' performance measurement and compensation.

Findings

Much research equates “share-based compensation” with “long-term compensation,” and the present study terms this relation “the myth of long-term compensation.” It is demonstrated that multiple features of share-based plans, characteristics of the management in question and contextual factors of the company and its governance tie in with the time orientation of such compensation. Multiple contradictions and irregularities in the literature on SBC are analyzed, undermining the claim that SBC is invariably LT oriented. Relying on Barthes' work, the study illustrates how LT SBC is a myth contributing to the ideology of neoliberalism.

Research limitations/implications

It is proposed that the terms “share-based compensation” and “long term” be distinguished from each other for analytical and practical purposes. SBC, and thus neoliberalism, can sometimes be linked to the short term.

Originality/value

“Long term” is illustrated as a significant instrument for deploying ideologies.

Keywords

Acknowledgements

The comments of the editor and anonymous referees are greatly appreciated. Their valuable advice has significantly helped to improve the study. The author also wishes to thank the Emil Aaltonen Foundation, the Jenny and Antti Wihuri Foundation, the Finnish Cultural Foundation, the Helsinki School of Economics Foundation, the Research Fund of Savings Banks and the OP-Pohjola Group Foundation for their funding of the research upon which this paper is based. The author would also like to thank Seppo Ikäheimo, Virginia Mattila, Tytti Niiva and the participants of the research seminars at the Turku School of Economics, the London School of Economics and the Annual Congress of the European Accounting Association, Paris, France, for their helpful comments on earlier versions of this paper. A special thank you is due to the case company representatives who kindly agreed to contribute their valuable time to this research project.Role of the funding sources : None of the funding sources had any role in the study’s design; in the collection, analysis and interpretation of data; in the writing of the report and in the decision to submit the paper for publication.

Citation

Chakhovich, T. (2021), "The “long term” as an instrument for deploying neoliberalism: the case of the myth of long-term compensation", Accounting, Auditing & Accountability Journal, Vol. 34 No. 8, pp. 1714-1739. https://doi.org/10.1108/AAAJ-12-2018-3783

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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