Essays On Stock Option Schemes And Ceo Compensation
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Essays On Stock Option Schemes And Ceo Compensation
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Author : Mikko Mäkinen
language : en
Publisher:
Release Date : 2007
Essays On Stock Option Schemes And Ceo Compensation written by Mikko Mäkinen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
Tiivistelmä.
Essays On Employee Stock Options And Executive Compensation In Non Diversified Companies
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Author : Pavlo Tsebro
language : en
Publisher:
Release Date : 2013
Essays On Employee Stock Options And Executive Compensation In Non Diversified Companies written by Pavlo Tsebro and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with Employee stock options categories.
Essay I. Prior literature suggests three explanations for why companies are granting stock options as a form of compensation to non-executive employees. Broad-based option grants can be used as an incentives tool, a sorting mechanism, and a means of assisting with employee retention. An alternative explanation also exists, namely, that financially constrained firms use broad-based option grants as a form of self-financing. This dissertation contributes to existing literature by examining the financial-constraints hypothesis in firms' option-granting practices. It is the first study to combine two independent approaches in testing the financial-constraints hypothesis in firm-wide option grants. Using simulated and empirical returns in utility model for a representative individual employee, I investigate whether option-based substitutions for a portion of payment in cash can result in economic savings to firms. Secondly, using empirical data on broad-based option grants and utilizing a financial constraints index and individual variable proxies for constraints, I examine the relationship between option grants and the severity of financial constraints to which the firm is subject. I find that direct financial benefits to the firm from the use of option grants are, in general, possible. However, sorting is more likely primary reason for using broad-based option grants, while self-financing is a positive side effect of sorting. Essay II. Agency problems are generally viewed in the literature as one of the reasons why the diversification discount exists. The adoption of equity-based forms of pay (EBC) in CEOs' compensation is considered one way of mitigating agency problems and thus enhancing the value of the firm. Essay II investigates how the intensity of EBC impacts the valuation of diversified firms in two dimensions of diversification: industrial and geographic. Building on the prior literature, this study takes a multi-dimensional approach by considering the combined effects of EBC levels, degrees of product, and geographic diversification on the valuation of the firm. Based on the results of this study I conclude that a firm's valuation is negatively affected by geographic diversification, but it is positively related to industrial diversification, while firms pursuing dual diversification strategies are valued at a discount. Use of the EBC helps to mitigate agency problems and has a positive effect on the firm's valuation. Finally, as a secondary objective I investigate whether regulatory changes (adoption of the SFAS No. 131, FASB 1997) affect the nature of the reported segment data. I find that new regulations do not materially alter the nature of the reported segment data, at least for the purposes of this study.
The Real Effects Of Ceo Compensation
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Author : Jing Luo
language : en
Publisher: Open Dissertation Press
Release Date : 2017-01-27
The Real Effects Of Ceo Compensation written by Jing Luo and has been published by Open Dissertation Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-01-27 with categories.
This dissertation, "The Real Effects of CEO Compensation: Evidence From Equity and Bonus Incentive Plans" by Jing, Luo, 羅婧, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: This thesis consists of two essays exploring the effects of executive compensation contracts on the real economy. Evidence from equity incentive schemes and annual bonus plans are provided separately in the two essays. The first essay examines the relation between CEO option compensation and bank risk-taking, and the role of CEO option compensation in affecting bank performance during the 2007-2008 financial crisis. Through panel regressions, I find that over the sample period (1993-2011), option awards received by bank CEO and CEO option holdings lead to higher bank risk which is not rewarded by better performance. Bank CEOs take more risk by engaging more in financial innovation and maintaining more risky loan portfolios. Institutional investors favor high option compensation in their own interests of pursuing short-term stock price upswing, while a larger board corrects this excessive risk-taking by providing bank CEOs with less option compensation. Cross-sectional evidence shows that during the crisis period, the effect of option compensation in increasing risk-taking and worsening performance comes from exercisable option holdings. In addition to the findings regarding option compensation, stock awards are shown to affect bank risk and performance, while stock holdings play no role. In the second essay, using a hand collected sample of 1491 firm-years spanning 2006-2011, for which I have been able to gather from annual incentive schemes performance measures and two levels of corresponding targets which represent board directors' performance expectations on chief executive officers (CEOs), I discover that the probability of CEO turnover significantly increases when a firm fails to meet its performance targets, and the likelihood of CEO replacement becomes even higher when minimum performance targets are missed. In a horse race of various financial measures used, failure to meet earnings targets most significantly increases the likelihood of CEO dismissal, and cash flow matters most when minimum targets are considered. Further, the effect varies with firm characteristics in that failing to meet revenue targets lead to turnover only in growth firms, while only in distressed firms CEOs are more likely to lose the job because of missing cash flow targets. Results are robust to the control of possible selection issues related to performance target disclosure and the choice of financial measures. Subjects: Executives - Salaries, etc
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 The Financial Behavior Of Corporations And Households
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Author : Scott J. Weisbenner
language : en
Publisher:
Release Date : 1999
Essays On The Financial Behavior Of Corporations And Households written by Scott J. Weisbenner and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with categories.
Essays On The Role Of Executive Compensation In The Subprime Mortgage Crisis And The Incentive Effects Of Executive Stock Options
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Author :
language : en
Publisher:
Release Date : 2014
Essays On The Role Of Executive Compensation In The Subprime Mortgage Crisis And The Incentive Effects Of Executive Stock Options written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Essays On Stock Option Compensation And The Role Of Incentives And Risk
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Author : Matts Rosenberg
language : en
Publisher:
Release Date : 2004
Essays On Stock Option Compensation And The Role Of Incentives And Risk written by Matts Rosenberg and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with categories.
Two Essays On Corporate Governance
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Author : Minhua Yang
language : en
Publisher:
Release Date : 2009
Two Essays On Corporate Governance written by Minhua Yang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Corporate governance categories.
This dissertation is composed by two essays that explore the changes in corporate governance around the passage of Sarbanes-Oxley (SOX) 2002. In the first essay, I examine the relation between board structure and compensation as a bargaining game between the board and the CEO. Bargaining game theories describe an endogenous process of determining the structure of director and CEO compensation. The Sarbanes-Oxley Act (SOX) altered the equilibrium of power between the board and CEO by changing the monitoring role of the board. SOX essentially provides a natural experiment to test how a shock to the bargaining game alters the balance of power between directors and the CEO. Using the ratio of director compensation to CEO compensation to proxy for bargaining power, I find a significant increase following the passage of SOX, consistent with directors gaining bargaining advantage. Moreover, firms with strong shareholder rights exhibit even greater evidence of power shifting to the directors. Overall, the results suggest that directors gain more power relative to the CEO in determining compensation plans and strong shareholder rights help firms to align directors' incentives with those of shareholders. In the second essay, I examine the relation between CEO compensation structure and acquirer returns. In the literature, researchers find that executive compensation structures influence corporate acquisition decisions. Equity-based executive compensation should reduce the non-value-maximizing behavior of acquiring managers. A series of corporate reforms such as SOX and the FASB expensing rule affected the structure of CEO equity-based compensation. I find a significant increase in CEO restricted stock compensation and a significant decrease in CEO option-based compensation following these reforms. I also find that CEOs with strong managerial power are more likely to receive more restricted stock in their compensation package after the 2002 reforms. Finally, I find a significant positive relation between the restricted stock compensation of acquiring firm CEOs and abnormal stock returns after 2002. This provides empirical support on the effectiveness of the shift away from options towards restricted stock in executive compensation packages. Restricted stock is associated with better merger decisions.
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.
Advances In The Economic Analysis Of Participatory And Labor Managed Firms
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Author : Tor Eriksson
language : en
Publisher: Emerald Group Publishing
Release Date : 2010-12-02
Advances In The Economic Analysis Of Participatory And Labor Managed Firms written by Tor Eriksson and has been published by Emerald Group Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-12-02 with Business & Economics categories.
Includes theoretical and empirical research into changing institutions and employee participation.