Top executives whose pay is linked to the stock prices of the companies they oversee are more likely to make stealth disclosures when their companies are forced to restate their financials, according to a new study.

The study, by Brian Hogan of the University of Pittsburgh and Gregory A. Jonas of Case Western Reserve University, appears in the September issue of the American Accounting Association journal Accounting Horizons. They analyzed nearly 1,200 corporate restatements to see which ones filed a Form 8-K with the Securities and Exchange Commission and which ones simply corrected the items in the misstated prior financial statements without taking special steps to signal the changes to investors. Others only amended their filings, which can cover a number of issues other than financial problems and may attract little more than a cursory look from investors.

The researchers found that the more top executives' pay depended on their companies' stock price, the bigger the likelihood of stealth disclosures. Their study suggests differences between the incentives for CFOs and CEOs.

“Prior literature shows that CFOs face more severe penalties than CEOs in the form of job loss and labor market penalties,” the researchers wrote. “With greater equity rewards at stake, CEOs may be more willing to take the risk of a low-transparency restatement disclosure. Conversely, CFOs, having relatively less equity-based pay and the risk of more severe penalties, may be less willing.”