Essays On Executive Compensation And Behavior
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Essays On Executive Compensation And Behavior
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Author : Robert Tumarkin
language : en
Publisher:
Release Date : 2010
Essays On Executive Compensation And Behavior written by Robert Tumarkin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
Executive Compensation Empirical Essays On The Antecedents And The Consequences And The Role Of Executive Personality
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Author : Steffen Florian Burkert
language : en
Publisher: BoD – Books on Demand
Release Date : 2023-03-10
Executive Compensation Empirical Essays On The Antecedents And The Consequences And The Role Of Executive Personality written by Steffen Florian Burkert and has been published by BoD – Books on Demand this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-03-10 with Business & Economics categories.
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.
Essays In Executive Compensation
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Author : Dan Zhang
language : en
Publisher:
Release Date : 2012
Essays In Executive Compensation written by Dan Zhang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
Essays On Corporate Governance And Executive Compensation
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Author : Patrick Bernard Washington
language : en
Publisher:
Release Date : 2016
Essays On Corporate Governance And Executive Compensation written by Patrick Bernard Washington and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with Electronic dissertations categories.
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.
Three Essays On Ceo Compensation Risk Taking Behavior And Subsequent Firm Performance
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Author : Wanrong Hou
language : en
Publisher:
Release Date : 2012
Three Essays On Ceo Compensation Risk Taking Behavior And Subsequent Firm Performance written by Wanrong Hou and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Chief executive officers categories.
Inducements In Organizations
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Author : Nicolas Tichy
language : en
Publisher: BoD – Books on Demand
Release Date : 2023-03-14
Inducements In Organizations written by Nicolas Tichy and has been published by BoD – Books on Demand this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-03-14 with Business & Economics categories.
Executive compensation has inspired controversial debate in both academia and the general public, and many voices criticize that executive compensation designs fail to deliver desired outcomes. Although much research has been devoted to understanding the antecedents and consequences of executive compensation design, important questions remain unanswered. This dissertation contributes to the field by exploring a previously neglected aspect: executive compensation complexity. Given the absence of an established measure of executive compensation complexity, there is an incomplete understanding of how complexity enters executive compensation contracts and what the consequences are for managers and corporations. The essays of this dissertation aim to narrow this gap. The first study presents a novel measure of executive compensation complexity, which is validated and utilized to examine the antecedents of executive compensation complexity. The second study explores the consequences of executive compensation complexity and finds that complexity impairs firm performance, regardless of the performance metric chosen (accounting-based, market-based, or ESG-based performance metrics). The third study explores the link between compensation design dispersion and executive turnover and reveals that executives with riskier compensation packages and fewer performance goals are more likely to move. The fourth study provides experimental evidence on the effect of CSR Fit dimensions and organizational reputation. Taken together, the essays of this dissertation make a significant and valuable contribution to the scholarly discourse on executive compensation. By shedding light on the complex nature of executive compensation and its implications for managers and corporations, this dissertation advances the current understanding of executive compensation and provides insights for policymakers, managers, and investors.
Essays On Top Management And Corporate Behavior
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Author : Hui-Ting Wu
language : en
Publisher: Rozenberg Publishers
Release Date : 2010
Essays On Top Management And Corporate Behavior written by Hui-Ting Wu and has been published by Rozenberg Publishers this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
Two Essays On The Effects Of External Pressure On Executive Compensation
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Author : Brandy Elaine Hadley
language : en
Publisher:
Release Date : 2015
Two Essays On The Effects Of External Pressure On Executive Compensation written by Brandy Elaine Hadley and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with Chief executive officers categories.
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.
Complex Compensation Empirical Essays On The Impact Of Compensation Design On Firm Performance Turnover And Organizational Justice
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Author : Tobias Oberpaul
language : en
Publisher: BoD – Books on Demand
Release Date : 2024-01-19
Complex Compensation Empirical Essays On The Impact Of Compensation Design On Firm Performance Turnover And Organizational Justice written by Tobias Oberpaul and has been published by BoD – Books on Demand this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024-01-19 with Business & Economics categories.
Compensation contracts have become ever more complex and individualized, particularly in the executive compensation domain, where increasingly diverse stakeholder demands and governance requirements have led to the inclusion of more and increasingly interrelated components into compensation contracts. Even the compensation of lower-level employees has become complex as firms individualize employee compensation and use many different rewards simultaneously. Research has examined elements of compensation in isolation but has attempted to avoid the complexities of compensation. This dissertation examines the consequences of compensation complexity and compensation design dispersion and contributes to a better understanding of compensation and its consequences for firms and employees. The first study examines how the complexity of executive compensation contracts affects firm performance. It finds that CEO compensation complexity negatively affects accounting, market, and ESG (i.e., environmental, social, and governance) metrics of firm performance and explores mechanisms that help explain the relationships. The second study examines the effect of compensation design dispersion within top management teams and its impact on executive turnover. The results show that compensation design dispersion affects executive turnover, both directly and in interaction with relative pay level. The third study addresses the role of compensation design dispersion in the development of procedural justice perceptions. Using two experiments, this study shows that compensation design dispersion causes lower procedural justice perceptions, which appears to be less problematic for participants with relatively easier to understand contracts. In summary, this dissertation provides a nuanced overview of complex compensation design and compensation design dispersion. The findings contribute to a better understanding of the effectiveness of compensation as an incentive and sorting tool for organizations, and of the implications of compensation design for the functioning of teams.
Three Essays In Mergers And Acquisitions And Executive Compensation
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Author : Nada El-Hassan
language : en
Publisher:
Release Date : 2021
Three Essays In Mergers And Acquisitions And Executive Compensation written by Nada El-Hassan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
Several studies in the finance literature (and other fields) focus on how compensation contracts of CEOs shape incentives and affect risk-taking behaviour. We examine how CEOs with varying risk appetites approach merger and acquisition (M&A) deals differently due to incentives driven by their compensation structure. Relying on VEGA, the sensitivity of executive's portfolio to a one percent change in volatility of stock returns, we document that acquirers and targets behave differently vis-à-vis their compensation. We show that a longer time to completion is related to the target VEGA (and not bidder VEGA). We also find that a more risk-taking CEO (as encouraged by VEGA) selling his firm would delay completing a deal by a significant three weeks. We conjecture that target CEOs choose to delay deal completion to look for better bids that tally their need to change their portfolio of company holdings. Next, we link executive compensation, mergers and acquisitions, and environmental, social and governance in one framework that produces new insights into how CEO's incentives yield sub-optimal investment decisions. Our sample consists of 1,280 mergers (M&A) from the period of 1993-2018 and uses the CEO's wealth sensitivity to stock price volatility (VEGA) as a proxy for risk-taking behaviour. We establish that there is a shift in the relation between CSR rating and cumulative abnormal announcement returns of M&As deals. After 2008, the market for corporate control no longer rewards more commitment to CSR activities. We examine the performance of our sample of mergers in comparison with that of a matched sample of non-bidding firms vis-à-vis their environmental, social and governance (ESG) profiles over the long term. Our results indicate that more CSR commitment does not translate into better long-term returns for shareholders and stakeholders if the firms participate in M&As. Moreover, we investigate how the bidder and target CSR ratings, as well as management risk-taking incentives (proxied by VEGA), affect deals total synergy estimated around the announcement day. Our results show that firms with lower CSR ratings yield more synergy gains, which are not related to both bidder and target risk-taking incentives. Finally, we provide new evidence related to the debate whether corporate social responsibility (CSR) strategies intrinsically benefit organizations and contribute to wealth creation after controlling for CEO compensation. We utilize a sample of M&A deals spanning the period 1993 to 2018 of target firms with different CSR ratings and investigate the effect of CEOs' executive compensation driven incentives. Our main finding is that Low CSR firms becoming targets of M&A contests in the subperiod post-2008 record the highest cumulative average abnormal returns (compared to High CSR over the same period and other subsamples). We report that Low CSR firms with High VEGA target CEOs specifically perform better in corporate control contests in later years. We justify this as Low CSR firms are characterized by lower governance and more agency costs where management seeks benefit its own interests instead of being considerate for the stakeholders at large.