Firm Diversification And Ceo Compensation
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Firm Diversification And Ceo Compensation
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Author : Nancy L. Rose
language : en
Publisher:
Release Date : 1994
Firm Diversification And Ceo Compensation written by Nancy L. Rose and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with Chief executive officers categories.
Data for a sample of 558 CEOs over 1985-1990 suggest substantial compensation premia for managers of diversified firms. The CEO of a firm with two distinct lines of business averages 10 to 12 percent more in salary and bonus and 13 to 17 percent more in total compensation than the CEO of a similar-sized but undiversified firm, all else equal. This corresponds to average 1990 salary gains of $115,000 to $145,000 per year for our sample. Diversification may raise pay because the CEO's job requires higher ability or because it is associated with CEO entrenchment. If ability explains the correlation, we would expect the diversification premium to be invariant to tenure. Entrenchment models suggest higher premia for more experienced (more entrenched) CEOs, and an increase in compensation when the CEO diversifies the firm. The data support an ability model over an entrenchment explanation. The diversification premium is unaffected by tenure, and increasing diversification reduces compensation for incumbent CEOs, all else equal.
Firms Diversification And Ceo Compensation
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Author : Nancy L. Rose
language : en
Publisher:
Release Date : 1998
Firms Diversification And Ceo Compensation written by Nancy L. Rose and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1998 with categories.
Data for a sample of 558 CEOs over 1985-1990 suggest substantial compensation premia for managers of diversified firms. The CEO of a firm with two distinct lines of business averages 10 to 12 percent more in salary and bonus and 13 to 17 percent more in total compensation than the CEO of a similar-sized but undiversified firm, all else equal. This corresponds to average 1990 salary gains of $115,000 to $145,000 per year for our sample. Diversification may raise pay because the CEO's job requires higher ability or because it is associated with CEO entrenchment. If ability explains the correlation, we would expect the diversification premium to be invariant to tenure. Entrenchment models suggest higher premia for more experienced (more entrenched) CEOs, and an increase in compensation when the CEO diversifies the firm. The data support an ability model over an entrenchment explanation. The diversification premium is unaffected by tenure, and increasing diversification reduces compensation for incumbent CEOs, all else equal.
Firm Diversification And Ceo Compensation
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Author : Nancy L. Rose
language : en
Publisher:
Release Date : 2000
Firm Diversification And Ceo Compensation written by Nancy L. Rose and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with categories.
Data for a sample of 558 CEOs over 1985-1990 suggest substantial compensation premia for managers of diversified firms. The CEO of a firm with two distinct lines of business averages 10 to 12 percent more in salary and bonus and 13 to 17 percent more in total compensation than the CEO of a similar-sized but undiversified firm, all else equal. This corresponds to average 1990 salary gains of $115,000 to $145,000 per year for our sample. Diversification may raise pay because the CEO's job requires higher ability or because it is associated with CEO entrenchment. If ability explains the correlation, we would expect the diversification premium to be invariant to tenure. Entrenchment models suggest higher premia for more experienced (more entrenched) CEOs, and an increase in compensation when the CEO diversifies the firm. The data support an ability model over an entrenchment explanation. The diversification premium is unaffected by tenure, and increasing diversification reduces compensation for incumbent CEOs, all else equal.
Firm Diversification And Ceo Compensation
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Author : Nancy L. Rose
language : en
Publisher: Forgotten Books
Release Date : 2017-06-16
Firm Diversification And Ceo Compensation written by Nancy L. Rose and has been published by Forgotten Books this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-06-16 with Business & Economics categories.
Excerpt from Firm Diversification and Ceo Compensation: Managerial Ability or Executive Entrenchment? Proponents of managerial entrenchment explanations argue that diversification frequently is undertaken by self-serving managers to increase the value of their compensation packages, even when diversification reduces the value of the firm. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.
Firm Diversification And Ceo Compensation Managerial Ability Or Executive Entrennchment
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Author : Nancy L. Rose
language : en
Publisher:
Release Date : 1994
Firm Diversification And Ceo Compensation Managerial Ability Or Executive Entrennchment written by Nancy L. Rose and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with categories.
Firm Diversification And Ceo Compensation
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Author : Nancy L. Rose
language : en
Publisher:
Release Date : 1994
Firm Diversification And Ceo Compensation written by Nancy L. Rose and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with categories.
Geographic And Industrial Corporate Diversification
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Author : Augustine Duru
language : en
Publisher:
Release Date : 2014
Geographic And Industrial Corporate Diversification written by Augustine Duru 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.
We explore the relation between corporate diversification and CEO compensation. We document that geographic diversification provides a compensation premium, while industrial diversification is associated with lower levels of CEO pay. We also examine the effect of corporate diversification on the structure and performance criteria of CEO compensation contracts. We find that both diversification strategies are associated with a greater use of incentive-based compensation and with a greater reliance on market-based, rather than accounting-based measures of firm performance. Finally, we address the question of whether shareholders reward CEOs for corporate diversification. We document that while value-enhancing geographic diversification is rewarded, non-value-enhancing industrial diversification is penalized.
Determinants Of Executive Compensation
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Author : Ellen Pavlik
language : en
Publisher: Praeger
Release Date : 1991-06-21
Determinants Of Executive Compensation written by Ellen Pavlik and has been published by Praeger this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991-06-21 with Business & Economics categories.
This book is a thorough study of what determines executive compensation levels, challenging prior research which tended to focus solely on the influence of corporate financial performance.
Pay For Performance And Firm Diversification
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Author : Thomas W. Bates
language : en
Publisher:
Release Date : 1997
Pay For Performance And Firm Diversification written by Thomas W. Bates and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with categories.
We find that CEO compensation is less sensitive to stock-price performance the greater the extent of firm diversification. Our empirical evidence is consistent with a theory of managerial entrenchment as well as with a theory of optimal contracting between shareholders and managers. To distinguish between the theories we examine the association between firm value and the structure of the compensation contract along with the use of alternative governance mechanisms in diversified firms. We find only a weak relation between the sensitivity of compensation to stock-price performance and the size of the value loss from diversification. Moreover, we find that the use of alternative governance mechanisms is not suppressed in diversified firms. Our results appear to be more consistent with optimal contracting, and suggest that the existence and magnitude of the diversification discount cannot be attributed to agency problems between managers and shareholders.
Downscoping
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Author : Robert E. Hoskisson
language : en
Publisher: Oxford University Press
Release Date : 1994-09-01
Downscoping written by Robert E. Hoskisson and has been published by Oxford University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994-09-01 with Business & Economics categories.
Large, diversified firms face unique challenges as they compete worldwide, and corporate restructuring is one way multinationals strive for competitive advantage. Weighing the pros and cons of a variety of approaches to restructuring, Downscoping offers executives a clear, strategic path through the maze. The authors show that when a multinational conglomerate fails to compete effectively, too much diversification may be the culprit. Whether the result of weak corporate governance or poor corporate strategy, over-diversification can make managers, unfamiliar with some of the markets in which they compete, opt for safety over innovation. This risk-aversion and lack of long-range commitment to innovation lead inevitably to stagnation over the longer term. The answer is not downsizing--closing offices and laying off personnel--but downscoping: a strategic approach to restructuring. The options include incentive and compensation adjustments for executives, leveraged buy-outs and capital structure changes, focusing on core skills, diversifying internationally while focusing on businesses in which a firm has strong competencies, and buying and selling mature businesses where product development is not a great concern. Regardless of the approach, executives must exercise strategic leadership during and after restructuring, including providing strategic direction, exploiting core competencies, developing human capital, and sustaining the corporate culture. Based on systematic research rather than casual observation, Downscoping provides a strong description of restructuring alternatives and their resulting tradeoffs. Its specific guidelines for maintaining competitiveness will be essential reading for managers involved in corporate restructuring.