ERN: CEO & Executive Motivation & Incentives (Topic)最新文献

{"title":"Local Boy Does Good: CEO Birthplace Identity and Corporate Social Responsibility","authors":"Zicheng Lei, D. Petmezas, P. Rau, Chen Yang","doi":"10.2139/ssrn.3718687","DOIUrl":"https://doi.org/10.2139/ssrn.3718687","url":null,"abstract":"We examine how CEO birthplace identity affects firm corporate social responsibility (CSR) activities. CEOs heading firms located in their home birth counties are associated with higher levels of CSR. The relation is more pronounced for CEOs with deeper home connections. Importantly, CSR activities by home CEOs are associated with significant increases in firm value relative to non-home CEOs. Additionally, home CEOs do not appear to extract private benefits, either directly or indirectly, from these activities. Overall, our results suggest that engaging in CSR will not necessarily increase levels of social trust and firm value. The place identity of the CEO also matters","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116695456","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Changing the Blame Game: Does the Presence of a Pay Ratio Disclosure Impact Nonprofessional Investors’ Reactions to CEOs’ Internal Attributions for Poor Firm Performance?","authors":"Nicole L. Cade, S. Kaplan, S. Loftus","doi":"10.2139/ssrn.3793291","DOIUrl":"https://doi.org/10.2139/ssrn.3793291","url":null,"abstract":"We conduct two experiments to investigate how the presence of the CEO pay ratio, a recently mandated disclosure, influences nonprofessional investors’ reactions to a CEO’s internal attributions for poor firm performance. Results of our first experiment suggest that relative to blaming oneself, blaming other firm employees for poor firm performance more effectively absolves a CEO from responsibility for poor firm performance and damages perceptions of the CEO’s trustworthiness less when a pay ratio disclosure is present versus absent. These perceptions, in turn, affect investors’ support for the CEO’s compensation and the company’s attractiveness as an investment. Our second experiment provides evidence of the underlying process, showing the pay ratio disclosure and the CEO’s attribution to other employees affects the perceived status of a CEO. Together, our findings inform managers about the impact of their attributions for poor firm performance and regulators about potential unintended consequences of pay ratio disclosures.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"71 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123041853","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"CEO compensation and bank loan contract","authors":"Chen Liu, Yan Wendy Wu","doi":"10.2139/ssrn.2930984","DOIUrl":"https://doi.org/10.2139/ssrn.2930984","url":null,"abstract":"Despite syndicated loan accounts for more than 40% of bank commercial loans, little is known about how bank CEO compensation impacts bank syndicated loan contracting. We find that banks with more CEO inside debt have lower non-performance loans and lend to safer borrowers. Using a two-stage selection model, we find that banks with more CEO inside debt extend syndicated loans with a smaller number of lenders in the syndication, lower spread, less restrictive covenant, and longer maturity. These loan terms indicate higher screening effort and borrower credit quality, consistent with the credit quality hypothesis of loan contracting. The findings are robust to potential endogeneity bias and simultaneity of various loan terms.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129552908","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"CEO Turnover and Accounting Earnings: The Role of Earnings Persistence","authors":"Inho Suk, Seungwon Lee, William Kross","doi":"10.1287/mnsc.2019.3559","DOIUrl":"https://doi.org/10.1287/mnsc.2019.3559","url":null,"abstract":"Although earnings persistence should have a nontrivial impact on chief executive officer (CEO) turnover decisions, prior studies have paid little attention to the role of earnings persistence in CEO turnover decisions. This study examines the effect of earnings persistence on the sensitivity (i.e., the negative relation) of CEO turnover to earnings performance. First, we find that the sensitivity of forced CEO turnovers to earnings performance is greater when earnings are more persistent. We also show that among numerous earnings attributes, earnings persistence is the most direct and dominant attribute in explaining CEO turnover-earnings sensitivity. Further, when the effect of earnings persistence on CEO compensation-earnings sensitivity is weak, the effect of earnings persistence on CEO turnover-earnings sensitivity is stronger, suggesting that the executive discipline system substitutes for the compensation system when earnings persistence is neglected by compensation policies. Overall, our findings suggest that earnings persistence plays a crucial role in CEO turnover decisions by elevating the board’s knowledge on the future performance implications of current earnings. Finally, the role of persistence is even more crucial when it is neglected by executive compensation policies. This paper was accepted by Shiva Rajgopal, accounting.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126181468","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Disclosure of Managerial Contract Information in a Vertically Related Market","authors":"M. Kopel, E. Putz","doi":"10.2139/ssrn.3590969","DOIUrl":"https://doi.org/10.2139/ssrn.3590969","url":null,"abstract":"The observability of managerial contract information in duopolies with strategic delegation has been an issue of controversial discussion. In a recent paper, Baik and Lee (2019) endogenize the decision to disclose the details of managerial contracts and show that in equilibrium, the owners of both firms have an incentive to always voluntarily reveal contract information, independent if firms compete in quantities or prices. We study how voluntary disclosure of contract information is affected by the presence of a supplier that provides an input to both firms. We demonstrate that under quantity competition, a partial disclosure equilibrium may occur if product differentiation is low. Disclosing firms punish their managers for sales to soften supplier pricing. Mandating disclosure increases total welfare, but consumer surplus decreases. Under price competition, firms always want to disclose. Finally, firm profits can be higher under price competition than under quantity competition.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"99 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116670916","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Payday Before Mayday: CEO Compensation Contracting for Distressed Firms","authors":"Mary Ellen Carter, E. Hotchkiss, Mahdi Mohseni","doi":"10.2139/ssrn.3211591","DOIUrl":"https://doi.org/10.2139/ssrn.3211591","url":null,"abstract":"Using a sample of more than 1,500 US public firms in the period 1998-2016, we examine how firms endogenously adjust CEO compensation contracts when they become financially distressed. The link between compensation and equity-based measures of firm performance is positive and strong prior to distress, but declines and becomes insignificant when firms are in distress. However, the relationship of pay to cash flow performance remains positive for distressed firms. Directly examining the ex-ante incentives provided in contracts rather than ex-post payouts, we provide evidence that firms respond to the onset of distress by providing incentives oriented toward improving cash flows. Specifically, distressed firms increase their use of performance-based pay but re-orient performance metrics towards cash flow related measures and set performance targets farther above prior performance. Further, these firms reduce equity-oriented incentives by increasing the proportion of expected performance-based compensation to be paid in cash rather than stock. These changes are economically most important for firms with the greatest need to replace out-of-the-money equity-based incentives, and in the years immediately preceding an actual default or bankruptcy. Overall, our findings are consistent with agency theory predicting that reduced incentives require contract realignment of managers with relevant stakeholders of distressed firms.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123159347","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Entrenchment through Discretion over M&A Contractual Provisions","authors":"Richard Schubert, Jan-Oliver Strych","doi":"10.2139/ssrn.3447867","DOIUrl":"https://doi.org/10.2139/ssrn.3447867","url":null,"abstract":"We apply the idea that managers of acquiring firms intend to entrench themselves through M&A in the sense of Shleifer and Vishny’s (1989) entrenchment strategy through manager-specific investments. We propose that these managers implement bidder termination fee provisions in M&A contracts to make it costly for acquirers’ shareholders to disapprove the deal after announcement and to prevent the manager from such entrenchment through M&A. In such cases, managers announce M&A deals before getting dis-missed after bad performance. Consistently, we find that the market reacts on average negatively to deal announcements if bidder termination fees are high and if the likelihood of imminent forced CEO turnover is high. For these firms we detect significant increases in their level of entrenchment post offer announce-ment. This finding is economically significant and is more pronounced if the CEO’s motivation for entrench-ment is high, subordinated managers are not motivated to intervene, directors are busy, and the deal is characterized as a diversifying takeover. The results suggest that small- to moderate-sized bidder termina-tion fees might serve as efficiency enhancing contractual devices, whereas excessively high fees destroy shareholder value and possibly signal agency problems.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124120646","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Frequent Acquirers and Management Compensation","authors":"C. Mishra","doi":"10.2139/ssrn.3508081","DOIUrl":"https://doi.org/10.2139/ssrn.3508081","url":null,"abstract":"We find significant positive contemporaneous, short-run, and long-run effects of an increase in the acquisition rate on management compensation. The long-run effect of an additional deal completed each year by an average acquirer increases management’s total, equity, and cash compensation by 21 percent, 7 percent, and 22 percent, respectively. Frequent acquirers, on average, pay their management 46 percent higher in total compensation, 55 percent higher in equity-based compensation, and 6 percent higher in cash-based (short-term) compensation, relative to non-frequent acquirers. Frequent acquirers pay higher equity-based compensation than cash-based compensation compared to non-frequent acquirers. Further, the impact of the acquisition rate on management compensation is higher for value-enhancing acquirers relative to value-destroying acquirers. We find a positive bi-directional influence between acquisition frequency and management compensation. Operationally more efficient acquirers are less likely to have a higher acquisition rate. Further, frequent acquisitions do not improve an acquirer’s operational efficiency, possibly due to constant post-acquisition integration challenges. We find a positive bi-directional causality between the total q (firm value) and the acquisition frequency, which may explain a positive association between overvalued stocks and acquisition frequency. A higher market value is likely to associate with higher acquisition frequency that is further likely to be associated with higher management compensation, Further, acquisition rate has a positive impact on the market share. Acquirers with a lower market share are more likely to become frequent acquirers. A causal order appears to exist from a lower market share to a higher acquisition frequency to a higher market value of the firm to higher management compensation. The increase in shareholder value associated with a higher acquisition frequency is not likely due to a gain in the operational efficiency, but morel likely due to an increase in the growth opportunities and market share of the acquirer. We find another causal order from a lower operational efficiency to a higher acquisition rate to a higher market share to higher management compensation. The causal orders may also explain why some studies may find a negative relation between management compensation and firm performance.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128774043","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Can Firms CEOs Predict the Future Performance after Going Public?","authors":"Kazuo Yamada","doi":"10.2139/ssrn.3417531","DOIUrl":"https://doi.org/10.2139/ssrn.3417531","url":null,"abstract":"This paper examines how the post-IPO operating performance is determined. Unlike previous studies, we obtain the expected operating performance of IPO firms. Our findings are as follow. First, we find weak evidence of the agency problem that IPOs with high secondary shares record lower sales, but the realized sales is still above the expected sales. We also find the cyclicity in the IPO market: the difference between realized and expected sales (profit) negatively relates to the IPO market.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127361372","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Is this Time Different? Do Bank CEOs Learn from Crises?","authors":"Yangxin Yu","doi":"10.2139/ssrn.3223200","DOIUrl":"https://doi.org/10.2139/ssrn.3223200","url":null,"abstract":"This paper studies how the early-career exposure of bank holding company (BHC) CEOs to the 1980s savings and loans (S&L) crisis affects corporate policies and survival of the BHCs they subsequently manage. I measure the “Intensity” of crisis exposure by the bank failure rate in the states where CEOs worked during the S&L crisis. First, I identify the characteristics of BHCs managed by high-Intensity (“experienced”) CEOs and find that such BHCs exhibit lower systemic risk and are less likely to fail: a one-unit increase in Intensity is associated with 0.39% lower systemic risk and an 0.5% lower failure rate. Second, I identify the type of banking policies that account for these results. In particular, experienced CEOs adopt a BHC business model that is less affected by interest rate shocks, and they exert more effective control over credit risk. Their BHCs hold relatively large amounts of liquid assets on the balance sheet. At the same time, asset growth and diversification strategies are not affected by CEOs’ exposure to the S&L crisis. Finally, I exploit exogenous turnovers of CEOs to demonstrate that these findings are not driven by bank–CEO matching.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126834314","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}