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Author: Thuong Quang Nguyen
Publisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 172
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Book Description
Author: Thuong Quang Nguyen
Publisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 172
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Book Description
Author: Phyllis Yolanda Keys
Publisher:
ISBN:
Category : Chief executive officers
Languages : en
Pages : 182
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Book Description
Author: Scott D. Tracy
Publisher:
ISBN:
Category :
Languages : en
Pages : 81
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Book Description
Author: Paul L. Joskow
Publisher:
ISBN:
Category : Chief executive officers
Languages : en
Pages : 56
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Book Description
This study explores the dynamic structure of the pay-for- performance relationship in CEO compensation and quantifies the effect of introducing a more complex model of firm financial performance on the estimated performance sensitivity of executive pay. The results suggest that current compensation responds to past performance outcomes, but that the effect decays considerably within two years. This contrasts sharply with models of infinitely persistent performance effects implicitly assumed in much of the empirical compensation literature. We find that both accounting and market performance measures influence compensation and that the salary and bonus component of pay as well as total compensation have become more sensitive to firm financial performance over the past two decades. There is no evidence that boards fail to penalize CEOs for poor financial performance or reward them disproportionately well for good performance. Finally, the data suggest that boards may discount extreme performance outcomes -both high and low - relative to performance that lies within some `normal' band in setting compensation.
Author: Timothy C. Carpenter
Publisher:
ISBN: 9781339034072
Category : Chief executive officers
Languages : en
Pages : 77
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Book Description
This dissertation examines the effects resultant from compensation committees' decisions on the structure and magnitude of executive compensation packages. Executive compensation has long been a contentious topic, both in the U.S. and abroad. Specifically, equity-based pay (eg. options and stock grants) has been increasing in popularity and met with mixed reactions. This form of remuneration aims to properly align the goals of executives with those of their shareholders; however, the use of equity based-pay tends to result in larger pay packages. Thus, the potential reasons for its recent popularity range from a forthright belief in its optimality to more Machiavellian motives. Moreover, incentive compensation has a number of secondary effects which must be accounted for, including effects on executive retention and accounting quality among many others. This line of research aims to improve our understanding of executive pay so compensation committees can better serve their shareholders by crafting more appropriate pay packages and better understanding the potential benefits and consequences therefrom. In Chapter One, I analyze the effect of cumulative wealth and unvested equity compensation on voluntary CEO turnover. I find that wealthier CEOs are less likely to retire or resign. This suggests that the CEO vetting process is able to sort out those individuals who would substitute high wealth for additional leisure. Consistent with Balsam and Miharjo (2007), CEOs with more unvested equity are significantly less likely to leave their position. However, I find that unvested equity is less effective as a retention device if the CEO has high existing wealth. In contrast to prior results, my results show no significant relation between existing CEO wealth and incentive compensation. In Chapter Two, I analyze the structure of compensation packages awarded in the United Kingdom compared to their U.S. counterparts. I consider the asymmetric relationship between CEO pay and firm performance in the U.S. and test for similar relations in the U.K. My findings confirm that asymmetry exists in the U.S. in that pay is more strongly associated with upside risk than downside risk. In contrast, U.K. CEO pay is more symmetrically associated with risk. Therefore, while U.S. CEOs face greater risk as a result of compensation with more equity-based pay, their pay to performance is asymmetrical. This suggests an additional component that risk-based arguments must consider before concluding that higher pay in the U.S. is structural and, thus, rational. Finally, in Chapter Three, I examine the effect of executive wealth on accounting quality. Results indicate that firms with wealthier CEOs are significantly more likely to restate earnings. To some extent this effect may be mitigated by compensation committees through the use of unvested compensation components, but this reduction is minimal. Firms with wealthier CEOs also exhibit greater levels of earnings management. Consistent with SEC auditors being aware of this, firms with wealthier CEOs are more likely to face an enforcement action, suggesting that these firms are both targeted and, ultimately, found in violation of accounting requirements. Chief Financial Officers' wealth shows a similar (and even stronger) relationship, increasing the likelihood of an earnings restatement as well as the magnitude of earnings management, but SEC enforcement actions do not reflect this relationship. My results suggest that SEC auditors may be able to improve governance by targeting firms that employ wealthy CFOs, and particularly those with recent large gains.
Author: John S. Beasley
Publisher: Edward Elgar Publishing
ISBN: 1781005109
Category : Business & Economics
Languages : en
Pages : 553
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Book Description
Research on executive compensation has exploded in recent years, and this volume of specially commissioned essays brings the reader up-to-date on all of the latest developments in the field. Leading corporate governance scholars from a range of countries set out their views on four main areas of executive compensation: the history and theory of executive compensation, the structure of executive pay, corporate governance and executive compensation, and international perspectives on executive pay. The authors analyze the two dominant theoretical approaches – managerial power theory and optimal contracting theory – and examine their impact on executive pay levels and the practices of concentrated and dispersed share ownership in corporations. The effectiveness of government regulation of executive pay and international executive pay practices in Australia, the US, Europe, China, India and Japan are also discussed. A timely study of a controversial topic, the Handbook will be an essential resource for students, scholars and practitioners of law, finance, business and accounting.
Author: Vaibhav Sharma
Publisher:
ISBN:
Category :
Languages : en
Pages : 120
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Book Description
Executive compensation and its potential importance in aligning shareholder and management interests has been an extensively researched area within corporate finance. This thesis studys executive compensation while addressing several unresolved issues in the literature. Essay one examines CEO compensation following spin-offs. The second essay studys changes in CEO salaries and their relation to firm performance. Essay three examines managerial decision horizons for target and acquirer firms in mergers and acquisitions.
Author: Brandy Elaine Hadley
Publisher:
ISBN:
Category : Chief executive officers
Languages : en
Pages : 139
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Book Description
This dissertation analyzes the impact of two external forces on executive compensation behavior. In the first chapter, the impact of political sensitivity is investigated as an external force on government contractor executive compensation. Compensation for top executives has come into the political spotlight, especially over the last decade, with many politicians publicly supporting limits on compensation. However, the impact of political scrutiny to limit compensation is debatable. This study analyzes the effect of political scrutiny on CEO compensation using a sample of Federal contractors, which represents a group of firms where politicians yield the most power. Results suggest that Federal contractors with the most visible government contracts that make up significant portions of their revenue have lower CEO compensation, but the efficiency of this compensation structure is debatable as it leaves CEOs with weaker incentives. However, the impact of political sensitivity is muted when the firm has more bargaining power with the government. In the second chapter, the effects of external forces of mandated compensation disclosure and shareholding voting requirements on compensation behavior are examined. Given the lack of guidelines provided for Dodd-Frank mandated Pay for Performance disclosure and the increase in alternative pay definitions used in Pay for Performance discussions, this chapter analyzes the determinants of and the effects on Say on Pay support of disclosing alternative pay measures. Results suggest that firms that disclose alternative pay measures in their Pay for Performance discussions do so for different reasons. Although certain measures are characteristic of opportunistic disclosure and others are indicative of informative disclosure, effects on Say on Pay are similar yet distinct. There is often a significant positive impact of disclosing additional information related to compensation on Say on Pay approval, particularly when combating prior poor Say on Pay support. However, the positive impact on Say on Pay support is most robust when peer comparisons are shared, providing evidence of the value of reporting comparative pay.
Author: Steffen Florian Burkert
Publisher: BoD – Books on Demand
ISBN: 3947095104
Category : Business & Economics
Languages : en
Pages : 233
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Book Description
Top managers have a significant impact on organizations because they are responsible for the formulation and implementation of corporate strategies, have the visibility and influence to shape the opinions of internal and external stakeholders, and coin the culture of their organizations, affecting employees at every level of the organization. Research has focused on the drivers and consequences of top managers' actions, with a particular focus on executive compensation, but important questions remain unanswered. This dissertation contributes to the literature on top executives by examining the antecedents of executive compensation, the influence of executive compensation on executive behavior, and the interplay of executive compensation and top executive personality. The first study introduces the role of compensation benchmarking for determining executive compensation to the management literature. It finds that benchmarking leads to compensation convergence. The second study examines the impact of executive compensation complexity on firm performance. The results show that compensation complexity is negatively related to accounting-based, market-based, and ESG-based metric of firm performance. The third study explores the implications of relative performance evaluation (RPE) on the imitation behavior of firms. It finds that the introduction of RPE is positively related to the imitation of the strategic actions of peer firms. The fourth study contributes to the growing literature on the impact of corporate social performance (CSP) goals in CEO contracts. Specifically, it examines how and when CSP incentives influence the CEO's attention to corporate social responsibility topics. The final essay examines the role of CEO personality; it finds that differences in CEO personality explain differences in the level of strategic conformity. Taken together, the essays in this dissertation make a significant contribution to the scholarly discourse on the influence of top managers on their companies. The empirical evidence presented expands the current understanding of how top executives affect strategic firm behaviors, and it provides insights for policymakers, managers, and investors.
Author: Eric Brisker
Publisher:
ISBN:
Category : Finance
Languages : en
Pages :
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Book Description
ABSTRACT: My dissertation examines the impact that executive compensation has on external financing decisions. In my first essay I examine the long-run stock and operating performance of firms following seasoned equity offerings based on the level of equity-based compensation the top five managers receive. I find that firms paying high levels of equity-based compensation experience lower abnormal stock returns and less favorable changes in operating performance in the three-year period following the issue than firms paying low, or no, equity-based compensation. Moreover, in calendar-time regressions, post-issue stock returns of issuers who pay high equity-based compensation do not load significantly on an investment factor, suggesting that these issuers have non-investment motives. Overall the findings support the premise that managers receiving high equity-based compensation act in the interest of current shareholders by issuing equity when they believe their stock is overvalued, while managers receiving low equity-based compensation do not. My second essay examines to what extent executive stock options received by the top five executives affects capital structure decisions and the debt-equity choice, and whether these effects are strengthened when a firm is near, or has recently received, a credit rating change. I hypothesize that executives receiving higher levels of stock options, especially stock options held that are in-the-money, as a percentage of their overall compensation are more risk averse due to greater sensitivity of their personal wealth portfolios to firm stock performance. As a result, they reduce the riskiness of the firm by reducing the amount of debt in the capital structure of the firm and issuing equity rather than debt when raising external financing. I also expect that the risk reduction is more pronounced when the firm is near a credit rating upgrade or downgrade, or has recently received a credit rating downgrade.
