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

{"title":"The Carrot: Executive Compensation, Risk-Taking and Innovation","authors":"Arnav Sheth","doi":"10.2139/ssrn.2632958","DOIUrl":"https://doi.org/10.2139/ssrn.2632958","url":null,"abstract":"Managers of firms with excess cash tend to misuse it. We extend the Radner-Shepp- Shiryaev framework, to create an incentive mechanism (the ‘carrot’) to motivate managers to pay out the cash instead. The problem cannot be solved in closed- form, and we devise a numerical technique to solve it. We find two main counter intuitive results: First, our mechanism results in higher firm value, and the greatest value goes to firms that are mid-level in their innovation. Second, we find that our mechanism increases risk-taking and interestingly, this is optimal to firm value maximization.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-08-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129856322","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":"Position, Power and Demand for CEOs: Understanding Executive Compensation in the U.S Market","authors":"V. Marisetty, Hiroshi Osano, Buvaneshwaran Venugopal","doi":"10.2139/ssrn.2831767","DOIUrl":"https://doi.org/10.2139/ssrn.2831767","url":null,"abstract":"It is hard to explain dramatic increase in executive compensation using existing theories based on power or position (Frydman and Jenter (2010)). We attempt to address this issue by using CEO promotion, as chairman of the board, as our identi cation strategy. CEO promotion is expected to have signifi cant increase in both position and power hence it is easy to control any unobservable factors associated with power and position. We observe 32,033 CEO-years of publicly listed rms in the US market during the period 1996-2011 and fi nd that, after controlling for observable position and power proxies, compensation of promoted CEOs, that is over and above their peer group CEO chairmen appointees, is mainly explained by contemporaneous peer group compensation shocks in CEO labor market. Our result suggests that market-speci fic peer group compensation in the U.S CEO labor market is more important determinant of executive compensation than fi rm-speci fic position or power. Our results have an important implication for recently introduced CEO-employee pay ratio regulation in the U.S market which uses firm-specifi c information that is attributed to power and position. Our results suggest that executive compensation is beyond their power and position and regulators should consider even CEO labor market forces.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"71 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132410720","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":"Executive Compensation, Director Compensation and Bank Capital Requirements Reform","authors":"Sanjai Bhagat, B. Bolton","doi":"10.2139/SSRN.2442501","DOIUrl":"https://doi.org/10.2139/SSRN.2442501","url":null,"abstract":"We study the executive compensation structure in the largest 14 U.S. financial institutions during 2000-2008. Our results are mostly consistent with and supportive of the findings of Bebchuk, Cohen and Spamann (2010), that is, managerial incentives matter - incentives generated by executive compensation programs led to excessive risk-taking by banks contributing to the current financial crisis. We recommend the following compensation structure for senior bank executives: Executive incentive compensation should only consist of restricted stock and restricted stock options - restricted in the sense that the executive cannot sell the shares or exercise the options for two to four years after their last day in office. Such an incentive compensation policy will discourage managers from undertaking high-risk investments that are value destroying; instead focus their attention on creating and sustaining long-term shareholder value.Also, we suggest that director incentive compensation be constructed along the lines noted above. Specifically, all incentive compensation for directors should only consist of restricted equity (restricted stock and restricted stock option) - restricted in the sense that directors cannot sell the shares or exercise the options for two to four years after their last board meeting. The above equity based incentive programs lose their effectiveness in motivating managers (and directors) to enhance shareholder value as a bank’s equity value approaches zero (as they did for the too-big-to-fail banks in 2008). Additionally, our evidence suggests that bank CEOs sell significantly greater amounts of their stock as the bank’s equity-to-capital ratio decreases. Hence, for equity based incentive structures to be effective, banks should be financed with considerable more equity than they are being financed currently. Greater equity financing of banks coupled with the above compensation structure for bank managers and directors will drastically diminish the likelihood of a bank falling into financial distress; this will effectively address the too-big-to-fail problem and the Volcker Rule implementation that are two of the more significant challenges facing the implementation of the Dodd-Frank Act.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132712193","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":"Executive Pay and Performance in Portuguese Listed Companies","authors":"Paulo F. Pereira Alves, E. Couto, Paulo Francisco","doi":"10.2139/ssrn.2422862","DOIUrl":"https://doi.org/10.2139/ssrn.2422862","url":null,"abstract":"This essay analyses the relationship between corporate governance practices and Chief Executive Officer (CEO) wages from a sample of Portuguese listed companies over the period from 2002-2011. The relationship between CEO total compensation and shareholders return, firm characteristics, CEO characteristics, board of directors and shareholders characteristics is analysed. It is found that firm specific factors accounts for the majority of the variance in total CEO pay, while firm performance accounts for less than 5%. It is also found that the CEO characteristics, board of directors’ structures, and shareholders features are related with the CEO pay. The policy implications of these results are then derived.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"107 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133731645","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":"Excessive Leverage and Bankers’ Pay: Governance and Financial Stability Costs of a Symbiotic Relationship","authors":"E. Avgouleas, Jay Cullen","doi":"10.2139/ssrn.2412869","DOIUrl":"https://doi.org/10.2139/ssrn.2412869","url":null,"abstract":"Debt has traditionally been viewed as an effective corporate governance tool. On the other hand, high leverage levels can lead to rapid expansion of the size of bank assets maximizing, in the short-to-medium term, banks return on equity. In the absence of regulatory controls on leverage, all it takes to assume excessive risks, even for benign bankers, is to imitate competitor business strategies. This form of herding can be motivated by compensation considerations or by career concerns. However, while bankers’ compensation has been a major factor behind bank short-termism, excessive leverage creates serious governance/agency costs even in the absence of compensation incentives. Therefore, a reasonably protective leverage ratio can prove an effective measure in containing rent seeking and smoothing up the leverage cycle to improve bank governance, prevent deep recessions, and safeguard financial stability.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131254072","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":"Say on Pay Laws, Executive Compensation, Pay Slice, and Firm Value around the World","authors":"Ricardo Correa, Ugur Lel","doi":"10.2139/ssrn.2328678","DOIUrl":"https://doi.org/10.2139/ssrn.2328678","url":null,"abstract":"Using a sample of about 90,000 observations from 38 countries over the 2001-2012 period, we provide three novel findings regarding say on pay (SoP) laws. First, we find robust evidence that SoP laws reduce CEO pay growth rates at firms. Second, such laws decrease the portion of total top management pay captured by CEOs. Firm values are higher following SoP laws in part because of this reduction in managerial pay inequality. Third, mandatory SoP laws only affect the CEO pay growth rates whereas advisory SoP laws influence various aspects of executive pay policies. These results are robust to instrumental variable estimation and nearest neighbor matching methods.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115017300","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":"Divide et Impera: Curbing Employees' Duties to Remain in Office","authors":"Hendrik Hakenes, Svetlana Katolnik","doi":"10.2139/ssrn.2402130","DOIUrl":"https://doi.org/10.2139/ssrn.2402130","url":null,"abstract":"By endogenizing a manger's optimal number of direct reports, we show how managers can exploit their organizational authority to shield themselves against replacement. Although the probability of hiring a star performer increases with the number of direct reports, each employee completes a smaller fraction of the overall task, such that learning about the employees' individual abilities occurs more slowly. We show that a manager maximizes the probability of retaining his job if he delegates a task to an infinite number of employees. Through the trade-off for the manager between decreasing his private costs of being replaced and increasing labor coordination costs, our model derives predictions of when managers tend to choose an excessively large number of direct reports, creating inefficiencies at the firm level.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130620859","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":"Factors Influencing CEO Compensation in US Telecommunication Industry","authors":"Tatiana Garanina, Yulia Ladyzhenko","doi":"10.18533/JEFS.V2I01.127","DOIUrl":"https://doi.org/10.18533/JEFS.V2I01.127","url":null,"abstract":"The objective of this paper is to define the relationship between a set of factors and CEO compensation that will enable companies to imply better corporate governance practices in their management process. Developed econometric model is tested on the data of US telecom companies for the period 2004-2012. The study revealed that CEO compensation is strongly and positively related to revenue and earnings per share of the company, and unrelated to return on net assets and market value added. These results enable companies to use CEO compensation system as an effective mechanism to eliminate agency problem and, consequently, agency costs. The main directions for further research in this field are outlined.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-02-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129430319","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":"Managerial Agency Costs of Socialistic Internal Capital Markets: Empirical Evidence from China","authors":"Jiwei Wang, Kangtao Ye","doi":"10.1111/jifm.12014","DOIUrl":"https://doi.org/10.1111/jifm.12014","url":null,"abstract":"This study provides empirical evidence of managerial agency costs in socialistic internal capital markets. Listed Chinese companies are required to disclose the amount of resources that are reallocated to other firms of the parent company, which provides us with a direct measure of the socialistic subsidization of weak member firms by strong member firms within a business group. We hypothesize that in strong member firms, managerial compensation is less sensitive to firm performance because cross-subsidization makes it difficult for group CEOs to hold the managers in strong firms accountable for their own firms’ performance, and also increases the noise in performance measures. We also hypothesize that socialistic cross-subsidization results in an increase in managerial agency costs of strong member firms due to the low pay-performance sensitivity and low incentive to work hard. We document empirical results that are consistent with these two predictions.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120427752","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":"Competition for Talent Under Performance Manipulation: CEOs on Steroids","authors":"I. Marinovic, Paul Povel","doi":"10.2139/ssrn.2344453","DOIUrl":"https://doi.org/10.2139/ssrn.2344453","url":null,"abstract":"We study how competition for talent affects CEO compensation, taking into consideration that CEO decisions and CEO skills or talent are not observable, and CEOs can manipulate performance as measured by outsiders. Firms compete by offering contracts that generate rents for the CEO. We derive the equilibrium compensation contract, and we describe how competition changes that contract and the outcome. Intuitively, competition increases realized CEO compensation. It also strengthens the incentive power of the contracts. While competition mitigates inefficiencies caused in its absence, it also generates inefficiencies of its own. Competition replaces a downward distortion by an upwards distortion (incentive power is excessively strong), and it switches the focus of equilibrium effort distortions from low-talent CEOs to high-talent CEOs. Competition leads to higher effort but also to more manipulation of measured performance. If the cost of manipulating performance is low, the distortions can outweigh those that are mitigated, and competition for talent may reduce the overall surplus. We discuss possible remedies, including regulatory limits to incentive compensation.","PeriodicalId":228319,"journal":{"name":"ERN: CEO & Executive Motivation & Incentives (Topic)","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122844641","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}