This paper examines the relationship between CEO incentives and earnings management, finding that firms with CEOs whose compensation is more closely tied to stock and option values exhibit higher levels of earnings management through discretionary accruals. The study uses data from the Compustat and Compustat Executive Compensation datasets to analyze how CEO incentives influence earnings management behavior. It shows that during periods of high accruals, CEOs and other insiders tend to exercise large amounts of options and sell significant quantities of shares. The findings suggest that highly incentivized CEOs are more likely to manipulate reported earnings to boost current performance, which may have negative consequences for shareholder value. The paper also finds that periods of high accruals coincide with increased option exercises and share sales by insiders, indicating a potential link between earnings management and executive behavior. The results support the idea that while stock-based incentives can align managerial interests with shareholders, they may also encourage earnings manipulation. The study contributes to the literature on earnings management, insider trading, and the effects of executive compensation on corporate behavior.This paper examines the relationship between CEO incentives and earnings management, finding that firms with CEOs whose compensation is more closely tied to stock and option values exhibit higher levels of earnings management through discretionary accruals. The study uses data from the Compustat and Compustat Executive Compensation datasets to analyze how CEO incentives influence earnings management behavior. It shows that during periods of high accruals, CEOs and other insiders tend to exercise large amounts of options and sell significant quantities of shares. The findings suggest that highly incentivized CEOs are more likely to manipulate reported earnings to boost current performance, which may have negative consequences for shareholder value. The paper also finds that periods of high accruals coincide with increased option exercises and share sales by insiders, indicating a potential link between earnings management and executive behavior. The results support the idea that while stock-based incentives can align managerial interests with shareholders, they may also encourage earnings manipulation. The study contributes to the literature on earnings management, insider trading, and the effects of executive compensation on corporate behavior.