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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: 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: 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: Patrick Bernard Washington
Publisher:
ISBN:
Category : Electronic dissertations
Languages : en
Pages : 138
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Book Description
This dissertation is composed of three essays that study the interconnections between blockholders and CEO power, and the link between deferred compensation (inside debt) and financial performance/firm behavior. In the first chapter, I consider agency theory's prediction that a large shareholder, "blockholder," can serve as an effective governance mechanism when monitoring man- agers by reducing CEO dominance. However, not all blockholders are created equally. Inside blockholders with large equity stakes may be subject to CEO influence. Outside blockholders may not fear the same career concerns. Using a novel approach, I sepa- rate blockholders into insiders (officers & directors) and outsiders when considering their relationship to CEO power, which is proxied by the CEO Pay Slice (CPS). However, separating blockholders into outside and officer specifications reveals that director block- holders reduce CEO power. Economic theory suggests that firms with multiple classes of shares have weak governance structures. A significant difference in CEO dominance inside dual class share firms versus single class share firms has been documented. This paper expounds on previous research and shed's light on the effect of insiders' differential shareholder rights in dual class share firms. Evidence is provided that shows as insiders' percentage of voting rights increase then CEO power (CPS) decreases. Also, the results reveal that as insiders' percentage of cash flow rights increase then CEO power (CPS) increases. In the second chapter, I study recent literature's documentation that inside debt is widely used in executive compensation contracts. Prior research has only focused on the CEO's level of inside debt. However, the inner workings of the top executive team, and their importance for firm performance are difficult to observe and measure. In this essay, I aim to contribute to the subject by introducing new measures pertaining to the rela- tionship between the CEO and the other members of the top executive team, as well as studying the relation between these measures and the value, performance, and behavior of public firms. My novel measure is the Slice of CEO Inside Debt (SCID) -- the frac- tion of the aggregate deferred compensation (inside debt) of the top-five executive team captured by the CEO. The effects of total deferred compensation account balances, firm contributions, executive contributions, and earnings on deferred compensation accounts are examined with respect to SCID. This research provides evidence of increased CEO tenure (entrenchment) in relation to the earnings measure of SCID, reduced spending on research and development in relation to the earnings measure of SCID, increased spend- ing on capital expenditures in relation to the executive contributions measure of SCID, and a lower probability of bankruptcy in relation to the executive contributions measure of SCID. Also, this paper shows that as the CEO's slice of deferred compensation from firm contributions and executive contributions increases then firm liquidity, i.e. working capital, decreases. In the final chapter, I consider prior research that has shown firms with CEOs who have less power take less risk. Thus, theory suggests that reducing CEO power through the use of deferred compensation, "inside debt," should motivate executives to become more risk averse. This essay investigates the relationship between the Slice of CEO Inside- Debt (SCID) — the fraction of the aggregate deferred compensation (inside debt) of the top-five executive team captured by the CEO — and CEO power (CPS--CEO Pay Slice) and corporate social responsibility (CSR). The effects of firm contributions, executive contributions, and earnings on deferred compensation accounts are examined with respect to SCID in relation to CPS and CSR. This research provides evidence of increased CEO power by showing that firms with CEOs who contribute more money to their deferred compensation accounts relative to the total amount deferred by the top five executives, including the CEO, have CEOs with greater power in the following year. Additionally, this essay studies firms use of inside debt and its effect on corporate social responsibility. Empirical evidence is provided that firms with CEOs who experience increased earnings on their deferred compensation accounts relative to the account earnings of top five executives are positively correlated with being more socially responsible.
Author: Dan Zhang
Publisher:
ISBN: 9789058923059
Category :
Languages : en
Pages : 145
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Book Description
Author: Rick Antle
Publisher: Springer Science & Business Media
ISBN: 0387303995
Category : Business & Economics
Languages : en
Pages : 334
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Book Description
The integration of accounting and the economics of information developed by Joel S. Demski and those he inspired has revolutionized accounting thought. This volume collects papers on accounting theory in honor of Professor Demski. The book also contains an extensive review of Professor Demski’s own contributions to the theory of accounting over the past four decades.
Author: Benjamin Hermalin
Publisher: Elsevier
ISBN: 0444635408
Category : Business & Economics
Languages : en
Pages : 762
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Book Description
The Handbook of the Economics of Corporate Governance, Volume One, covers all issues important to economists. It is organized around fundamental principles, whereas multidisciplinary books on corporate governance often concentrate on specific topics. Specific topics include Relevant Theory and Methods, Organizational Economic Models as They Pertain to Governance, Managerial Career Concerns, Assessment & Monitoring, and Signal Jamming, The Institutions and Practice of Governance, The Law and Economics of Governance, Takeovers, Buyouts, and the Market for Control, Executive Compensation, Dominant Shareholders, and more. Providing excellent overviews and summaries of extant research, this book presents advanced students in graduate programs with details and perspectives that other books overlook. Concentrates on underlying principles that change little, even as the empirical literature moves on Helps readers see corporate governance systems as interrelated or even intertwined external (country-level) and internal (firm-level) forces Reviews the methodological tools of the field (theory and empirical), the most relevant models, and the field’s substantive findings, all of which help point the way forward
Author: Barry Staw
Publisher: Elsevier
ISBN: 0080525172
Category : Business & Economics
Languages : en
Pages : 387
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Book Description
This twenty-sixth volume of Research in Organizational Behavior presents a set of well-crafted and thoughtful essays on a series of research topics. They range from efforts to redirect the study of leadership, to analyses of interpersonal relationships, to considerations of cross-cultural issues in organizing work, to discussions of institutional and environmental forces on organizational outcomes. Each of these essays includes a thorough review of the relevant literature, and more importantly, pushes that literature forward with new conceptual analysis and theory. In short, these essays continue the spirit of "rigorous eclecticism" that has exemplified the annual publication of ROB. As a collection, this year's set of essays provides a healthy advance for the field of organizational behavior. They are examples of serious scholarship that extend and challenge our current thinking about organizations and the behavior of its participants. Many of these chapters will take their place among the best presented by the Research in Organizational Behavior series. • Revisiting the Meaning of Leadership • When and How Team Leaders Matter • Normal Act of Irrational Trust: Motivated Attributions and the Trust Development Process • Gender Stereotypes and Negotiation Performance: An Examination of Theory and Research • Third-Party Reactions to Employee (Mis)treatment: A Justice Perspective • Subgroup Dynamics in Internationally Distributed Teams: Ethnocentrism or Cross-National Learning? • Protestant Relational Ideology: The Cognitive Underpinnings and Organizational Implications of an American Anomaly • Isomorphism In Reverse: Institutional Theory as an Explanation For Recent Increases in Intraindustry Heterogeneity and Managerial Discretion • The Red Queen: History-Dependent Competition Among Organizations
Author:
Publisher:
ISBN:
Category : Dissertations, Academic
Languages : en
Pages : 672
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Author: David Larcker
Publisher: FT Press
ISBN: 0132367076
Category : Business & Economics
Languages : en
Pages : 497
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Book Description
Corporate Governance Matters gives corporate board members, officers, directors, and other stakeholders the full spectrum of knowledge they need to implement and sustain superior governance. Authored by two leading experts, this comprehensive reference thoroughly addresses every component of governance. The authors carefully synthesize current academic and professional research, summarizing what is known, what is unknown, and where the evidence remains inconclusive. Along the way, they illuminate many key topics overlooked in previous books on the subject. Coverage includes: International corporate governance. Compensation, equity ownership, incentives, and the labor market for CEOs. Optimal board structure, tradeoffs, and consequences. Governance, organizational strategy, business models, and risk management. Succession planning. Financial reporting and external audit. The market for corporate control. Roles of institutional and activist shareholders. Governance ratings. The authors offer models and frameworks demonstrating how the components of governance fit together, with concrete examples illustrating key points. Throughout, their balanced approach is focused strictly on two goals: to “get the story straight,” and to provide useful tools for making better, more informed decisions.
Author: Jennifer Carpenter
Publisher: Springer Science & Business Media
ISBN: 1475751923
Category : Business & Economics
Languages : en
Pages : 159
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Book Description
Executive compensation has gained widespread public attention in recent years, with the pay of top U.S. executives reaching unprecedented levels compared either with past levels, with the remuneration of top executives in other countries, or with the wages and salaries of typical employees. The extraordinary levels of executive compensation have been achieved at a time when U.S. public companies have realized substantial gains in stock market value. Many have cited this as evidence that U.S. executive compensation works well, rewarding managers who make difficult decisions that lead to higher shareholder values, while others have argued that the overly generous salaries and benefits bear little relation to company performance. Recent conceptual and empirical research permits for the first time a truly rigorous debate on these and related issues, which is the subject of this volume.
