Accounting and finance literature have found that compensation package of an executives can be the motivation behind the engagement of earnings management. The study attempts to investigate the Chief Financial Officer as an executive since majority of research has been primarily focused on the top executive, the Chief Executive Officer. The CFO was chosen because their responsibilities which includes the overseeing the financial reporting. Specifically, the paper examined whether there is any relationship between the CFO's market-based compensation and accrual-based earning management. Using a sample of 54 European Union listed companies, the paper studies the effect on CFO's market-based executive compensation on earnings management using OLS regression models. The results show no significant relationship between CFO's marketbased compensation and earning management. Therefore, the findings are inconsistent with evidence found in prior research papers.