Corporate Governance: Compensation of Executive & Directors eJournal最新文献

{"title":"'Escaping TARP'","authors":"Linus Wilson, Yan Wendy Wu","doi":"10.2139/ssrn.1619689","DOIUrl":"https://doi.org/10.2139/ssrn.1619689","url":null,"abstract":"This paper studies the factors that were associated with a bank’s early exit from TARP in 2009. Executive pay restrictions were often a rationale cited for early TARP exit, and high levels of CEO pay were associated with banks being significantly more likely to escape TARP. In addition, we find that larger publicly traded banks with better accounting performance, stronger capital ratios, and fewer troubled loans and other assets exited early. Banks that raised private capital in 2009 were significantly more likely to return the taxpayers’ money early. The original eight TARP recipients, which received $165 billion of the $245 billion passed out, had weak tangible common equity ratios at the end of 2008, relative to other TARP recipients. Those eight banks raised common equity capital in 2009, and all at least partially exited the government’s embrace.","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126959250","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":"First Approaches Towards Relational Contracts","authors":"Michael D. Diathesopoulos","doi":"10.2139/ssrn.1625364","DOIUrl":"https://doi.org/10.2139/ssrn.1625364","url":null,"abstract":"This paper presents a comprehensive literature review of relational contracts theory. The major focus of the paper is on the legal aspect of relational contracts theory and mainly on MacNeil work, especially referring to contractual and relational norms. However, we do not neglect the impact of this theory on management science and its interaction with other approaches of managerial science. Moreover, the paper analyses the content and the scope of each of MacNeil's norms and highlights their central and significant position in relational contacts theory key literature. We also presents the gradual conceptual evolution and cohesion between the different arguments and aspects of relational contracts literature. Finally, the paper comments on the theory's acceptance, value and practicality, also suggesting that a more comprehensive and shorter model of norms would be useful.","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125277498","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":"One Page Commentary on the Unrecognized Core Problem with Executive Pay Today","authors":"Hermann J. Stern","doi":"10.2139/SSRN.1624223","DOIUrl":"https://doi.org/10.2139/SSRN.1624223","url":null,"abstract":"The core problem of executive pay is neither shareholder votes on pay as discussed in the US and Switzerland, nor a multi-year assessment period as made mandatory in Germany by law. The core problem is non-indexed performance measurement which causes in-reversibly spiraling executive bonuses.","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-06-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123802014","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":"Impact of CEO Compensation on Earnings Management","authors":"Imen Fakhfakh","doi":"10.2139/ssrn.1621807","DOIUrl":"https://doi.org/10.2139/ssrn.1621807","url":null,"abstract":"Executive compensation is regarded as an internal mechanism to reduce agency problems. A number of researches proved evidence that the use of performance-based pay schemes induces the CEO to manipulate earnings. Using a sample of 253 firms of \"fortune 1000\" (1994-2005), we examine the effect of the compensation contract design on the earning management behaviour. We show that the use of the discretionary accruals as proxy of earning management is more pronounced at firms where the CEO’s compensation is more closely tied to the equity value. The analysis during the pre- and post- Sarbanes Oxley periods support that the effect of the incentive ratio on earnings management is more pronounced during the first period and it becomes non significant during the second period, indicating that the incentive effect is slowed down by the new conditions imposed by SOX.","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-06-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125848032","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":"Too Much Pay Performance Sensitivity?","authors":"Ivan E. Brick, Oded Palmon, John K. Wald","doi":"10.2139/ssrn.1108522","DOIUrl":"https://doi.org/10.2139/ssrn.1108522","url":null,"abstract":"We examine the relation between pay-performance sensitivity (PPS), the convexity of managerial compensation (Vega), and future stock risk and returns for a large sample of firms between 1992 and 2004. Higher PPS and Vega are both associated with lower future stock returns. Part of this negative relation can be explained by risk-averse managers decreasing equity risk in response to increases in PPS and Vega. However, even after correcting for lower future risk, future stock returns are negatively associated with the magnitude of option sensitivity. This finding is consistent with previous studies that link high option compensation to manager-owner agency problems. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117048037","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":"Reining in Excessive Risk Taking by Executives: Experimental Evidence","authors":"M. Lefebvre, Ferdinand M. Vieider","doi":"10.2139/ssrn.1573640","DOIUrl":"https://doi.org/10.2139/ssrn.1573640","url":null,"abstract":"Compensation of executives by means of equity has long been seen as a means to tie executives' income to company performance, and thus as a solution to the principal-agent dilemma created by the separation of ownership and management in publicly owned companies. The overwhelming part of such equity compensation is currently provided in the form of stock-options. Recent events have however revived suspicions that the latter may induce excessive risk taking by executives. In an experiment, we find that subjects acting as executives do indeed take risks that are excessive from the perspective of shareholders if compensated through options. Comparing compensation mechanisms based on stock-options to long-term stock-ownership plans, we find that the latter significantly reduce the uptake of excessive risks by aligning the executives' interests with those of shareholders. Introducing an institutionalized accountability mechanism consisting in the requirement for executives to justify their choices in front of a shareholder reunion also reduces excessive risk taking, and appears to be even more effective than long-term stock-ownership plans. A combination of long-term stock-ownership plans and increased accountability thus seem a promising direction for reining in excessive risk taking by executives.","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132298103","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":"Screening Versus Sorting in a Principal-Agent Model with Moral Hazard and Adverse Selection","authors":"R. Banker, Shaopeng Li, J. Plehn-Dujowich","doi":"10.2139/ssrn.1570706","DOIUrl":"https://doi.org/10.2139/ssrn.1570706","url":null,"abstract":"This paper proposes a principal-agent model of moral hazard and adverse selection that introduces the notion of screening, which is distinct from sorting; and distinguishes between ability that is privately known by the agent versus general ability that is observable by the principal and market. Sorting is the traditional process by which the adverse selection problem is resolved. Screening is the process we propose by which agents that are deemed to be unsuitable are rejected. Used in conjunction with sorting, we consider ex-ante screening on the basis of the (observable) measure of general ability; and ex-post screening on the basis of the private measure of ability. We identify the benefits and costs incurred by the principal associated with hiring an agent with superior ability, and derive the manner in which the compensation mechanism should be adjusted to take into account the roles of screening. The principal may prefer agents with inferior qualifications, rejecting those who are “overqualified”; conversely, she may select an agent with a distinguished pedigree, rejecting agents who are “underqualified”. Screening alters the relationship between the compensation mechanism and the characteristics of the agency relationship, causing established results to change, such as the negative link between risk and incentives. The empirical ramifications of screening are important: not controlling for screening introduces bias and inconsistency in estimation.","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133096783","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":"Entrepreneurial Finance Meets Organizational Reality: Comparing Investment Practices and Performance of Corporate and Independent Venture Capitalists","authors":"Gary Dushnitsky, Z. Shapira","doi":"10.1002/SMJ.851","DOIUrl":"https://doi.org/10.1002/SMJ.851","url":null,"abstract":"This paper investigates the effect of compensation of corporate personnel on their investment in new technologies. We focus on a specific corporate activity, namely corporate venture capital (CVC), describing minority equity investment by established-firms in entrepreneurial ventures. The setting offers an opportunity to compare corporate investors to investment experts, the independent venture capitalists (IVCs). On average, we observe a performance gap between corporate investors and their independent counterparts. Interestingly, the performance gap is sensitive to CVCs' compensation scheme: it is the largest when CVC personnel are awarded performance pay. Not only do we study the association between incentives and performance but we also document a direct relationship between incentives and the actions managers undertake. For example, we observe disparity between the number of participants in venture capital syndicates that involve a corporate investor, and those that consist solely of IVCs. The disparity shrinks substantially, however, for a subset of CVCs that compensate their personnel using performance pay. We find a parallel pattern when analyzing the relationship between compensation and another investment practice, staging of investment. To conclude, the paper investigates the three elements of the principal-agent framework, thus providing direct evidence that compensation schemes (incentives) shape investment practices (managerial action), and ultimately investorsi¦ outcome (performance).","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-08-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115075243","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":"2007 CEO Perquisites and Supplemental Retirement Benefits Study","authors":"J. Reda, David M. Schmidt","doi":"10.2139/SSRN.2384887","DOIUrl":"https://doi.org/10.2139/SSRN.2384887","url":null,"abstract":"In light of the new disclosure requirements for perquisites circulated by the Securities and Exchange Commission, James F. Reda and Associates, located in New York, New York, analyzed perquisite and supplemental retirement disclosures for Chief Executive Officer’s at Fortune magazine’s top 150 public companies. For proxies filed in 2007, publicly-traded companies must disclose in the Summary Compensation Table (SCT) the annual value of perquisites and supplemental retirement benefits. Perquisites can range from country club memberships, home security systems to personal use of aircraft. Supplemental retirement benefits include the change in the accrued pension value and preferential/above-market earnings on deferred compensation. For the first time, shareholders can see the value of these additional compensation items -- which some have referred to as “stealth compensation” since they previously were unreported.For this review, we separated retirement-related benefits from personal perquisites, and included a table to highlight other information such as dividends on unvested restricted stock, flexible personal spending accounts, charitable awards, and relocation assistance.","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115811970","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":"은행 경영정책에 대한 경영자 보상구조의 영향 (The Effect of Executive Compensation on Managerial Decision Makings in Banking Industry)","authors":"Sang-Gyung Jun, Mookwon Jung","doi":"10.2139/ssrn.3019760","DOIUrl":"https://doi.org/10.2139/ssrn.3019760","url":null,"abstract":"<b>Korean Abstract:</b> 본 연구는 경영자 스톡옵션과 보유주식 등 경영자 부의 델타 및 베가와 스톡옵션보상의 비중을 직접 측정한 후, 이들과 은행의 경영정책과 연관성을 검토함으로써 경영자 보상구조의 영향을 구체적으로 분석한다. 은행의 영업정책 변수로는 파생상품보유액 및 파생상품거래량, 예대율 및 예대마진율을 사용하며, 재무정책 변수로는 BIS 비율과 총부채비율을 사용한다. 분석결과에 의하면, 델타 및 베가와 스톡옵션보상의 비중이 파생상품보유액 및 거래량, 예대율 및 예대마진율, 그리고 BIS 비율과는 양( )의 상관관계를 가지며, 총부채비율과는 음(-)의 상관관계가 있음을 보여준다. 이는 주가 및 주가변동성에 대한 경영자 부의 민감도가 높을수록 그리고 경영자보상에서 스톡옵션이 차지하는 비중이 클수록 은행은 수익원 확대를 위해 적극적이며, 수익성을 높이기 위해 공격적으로 되며, 레버리지를 낮춤으로써 자기자본에 충실을 기하려는 유인을 가지게 된다는 것을 보여준다. 이 결과들은 스톡옵션 등 경영자 보상구조가 은행의 경영정책에 전반적으로 유의한 영향을 미치고 있다는 것을 보여주며, 또한 현재 국내은행 경영진에게 부여된 주가연계형 보상구조는 부채비율 증대나 위험자산 증대 등을 초래할 정도의 과도한 수준은 아니라는 것을 암시한다고 해석될 수 있다.<br><br><b>English Abstract:</b> We investigate how the executive compensation scheme affects managerial decision makings in banking industry. The wealth sensitivity of executive compensation scheme is measured by delta (wealth-to- performance sensitivity), vega (wealth-to-volatility sensitivity) of managers' wealth, and the relative size of stock option compensation. For business policy variables, we choose derivative holdings and trading, loan-deposit ratio and margin, For financial policy variables, we choose BIS ratio and leverage ratio. Our empirical results show that delta, vega, and the relative size of stock option compensation are positively related to derivative holdings and trading, loan-deposit ratio and margin, and BIS ratio, but are negatively related to leverage ratio. These results imply that banks whose compensation schemes are more sensitive to stock price and volatility are not only more inclined to actively diversify income sources and to increase profitability, but they are also more devoted to maintaining adequate level of capital by lowering leverage. Our findings suggest that the equity-based compensation such as stock options has a significant effect on managerial decision makings in banking industry and that the current compensation scheme is not too excessive to lead bank managers to higher level of leverage and preference to risky assets.","PeriodicalId":279731,"journal":{"name":"Corporate Governance: Compensation of Executive & Directors eJournal","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116048192","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}