Management Compensation in the Electric Utility Industry PDF Download
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Author: American Public Power Association
Publisher:
ISBN:
Category : Electric industry workers
Languages : en
Pages : 19
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Book Description
Author: American Public Power Association
Publisher:
ISBN:
Category : Electric industry workers
Languages : en
Pages : 19
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Book Description
Author: Paul L. Joskow
Publisher:
ISBN:
Category :
Languages : en
Pages : 33
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Book Description
This study explores the effect of regulatory and political constraints on the level of CEO compensation for 87 state-regulated electric utilities during 1978-1990. The results suggest that political pressures may constrain top executive pay levels in this industry. First, CEOs of firms operating in regulatory environments characterized by investment banks as relatively `pro-consumer' receive lower compensation than do CEOs of firms in environments ranked as more friendly to investors. Second, CEO pay is lower for utilities with relatively high or rising rates, or a higher proportion of industrial sales, consistent with earlier research that describes political pressures on electricity rates. Finally, attributes of the commission appointment and tenure rules affect CEO compensation in ways consistent with the political constraint hypothesis: for example, pay is lower in states with elected commissioners than in states where commissioners are appointed by the governor, all else equal. Despite apparently effective pressure to constrain pay levels in this sector, however, we find no evidence of related intra-industry variation in the sensitivity of pay to firm financial performance.
Author: Ben Johnson (M.S.)
Publisher:
ISBN:
Category : Electric industry workers
Languages : en
Pages : 336
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Book Description
Author: Paul L. Joskow
Publisher:
ISBN:
Category : Administrative agencies
Languages : en
Pages : 31
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Book Description
This study explores the effect of regulatory and political constraints on the level of CEO compensation for 87 state-regulated electric utilities during 1978-1990. The results suggest that political pressures may constrain top executive pay levels in this industry. First, CEOs of firms operating in regulatory environments characterized by investment banks as relatively pro-consumer' receive lower compensation than do CEOs of firms in environments ranked as more friendly to investors. Second, CEO pay is lower for utilities with relatively high or rising rates, or a higher proportion of industrial sales, consistent with earlier research that describes political pressures on electricity rates. Finally, attributes of the commission appointment and tenure rules affect CEO compensation in ways consistent with the political constraint hypothesis: for example, pay is lower in states with elected commissioners than in states where commissioners are appointed by the governor, all else equal. Despite apparently effective pressure to constrain pay levels in this sector, however, we find no evidence of related intra-industry variation in the sensitivity of pay to firm financial performance
Author:
Publisher:
ISBN:
Category : Executives
Languages : en
Pages : 300
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Book Description
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 168
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Book Description
Author:
Publisher:
ISBN:
Category : Electric utilities
Languages : en
Pages : 252
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Book Description
Author: David Adam Nislick
Publisher:
ISBN:
Category : Electric utilities
Languages : en
Pages : 414
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Book Description
Author: Stephen Bryan
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This study tests whether firms in the electric utility industry alter their compensation policies in response to the recent and dramatic changes that the 1992 Energy Policy Act imposes on their operating and regulatory environment. The 1992 Act intensifies competition in the utility industry by opening up the generation and wholesale markets for electric power, thereby providing greater managerial incentives to improve utilities' operating efficiency. Our evidence shows that utilities significantly increased (by almost 70%) the CEO cash compensation-earnings performance sensitivity in the post-1992 period compared to the pre-1992 period. Additionally, an analysis for non-utility firms does not indicate such a high increase in the CEO cash compensation-earnings sensitivity over the same period. Further, electric utilities that diversify into unregulated operations and that operate in a less severe regulatory environment exhibit an even greater increase in the CEO cash compensation-earnings sensitivity over the same period of time. Unlike the generation and wholesale sectors of the utility industry, however, rate-setting, capital investments, and retail operations remain regulated, thereby limiting managerial discretion in exploiting future investment opportunities. Consequently, we find that the sensitivity of utility CEO stock-based compensation (stock option compensation and stock ownership) to stock performance does not increase in the post-1992 period relative to the pre-1992 period. Finally, our comparison of electric utilities to independent power producers (IPPs), which have less constrained investment opportunities, shows that the average proportion of CEO stock option compensation for IPPs is six times greater than that for electric utility CEOs.
Author: Kurt A. Strasser
Publisher: Praeger
ISBN:
Category : Business & Economics
Languages : en
Pages : 224
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Book Description
This book proposes a new approach to the government regulation of utilities. Arguing that traditional command-and-control regulation does not encourage efficient performance, Strasser and Kohler advocate the use of an incentive-based regulatory system and offer a practical, realistic strategy for the successful implementation of such plans within the context of utility regulation. The analysis is supported by a comprehensive survey of the relevant legal materials, an overview of the literature on organization theory and institutional economics, and a survey of the latest thinking on how incentives can most effectively be paid. Strasser and Kohler begin by identifying problems associated with current regulatory techniques, demonstrating that disincentives are often built into the regulatory system. When that system has tried incentives, the authors show they have been applied in an ad hoc manner, further exacerbating the problem. In presenting the case for incentive-based regulation, the authors review the history of comprehensive incentive plans, look at what organization theory can teach us about using incentives as a regulatory strategy, and explore the effective use of incentive compensation by nonregulated companies. Strasser and Kohler then develop a strategy for implementing incentive plans in regulated utilities, showing that, in order to work, the plans must include the installation of clearly defined bonuses and penalties, specific standards of performance, the payment of bonuses to managers rather than shareholders, and reliable and complete measures of company performance. Policymakers, economists, public utility regulators, and attorneys involved in the complex arena of utility regulation will find Regulating Utilities with Management Incentives indispensable reading.
