Download or read book Essays on Executive Turnover written by Johan Maharjan and published by . This book was released on 2015 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt: Chapter 1 deviates from the conventional practice by highlighting an alternative to forced CEO turnover. An interesting puzzle in corporate finance is the week sensitivity of disciplinary action against CEO to poor firm performance. I show that this weak relation is in part driven by an overlooked alternative to firing, which in practice takes the form of splitting the CEO-Chairman role or demoting the incumbent CEO to the executive Chairman position. I first document that such demotions are a frequently used alternative disciplinary mechanism, accounting for nearly 40% of all involuntary CEO transitions. I further show that the use of this mechanism is concentrated among firms in which the CEO is most entrenched or the cost of firing its CEO is high, i.e. CEOs with firm or industry-specific managerial skills and those with strong long-term performance and weak governance. Market reactions to CEO demotions are positive, on average. Finally, I show that classifying CEO demotions as an alternative form of involuntary turnover magnifies the sensitivity of involuntary turnover to firm performance and eliminates the relation between performance and voluntary turnover. In chapter 2, we examine the role of deferred vesting of stock and option grants in reducing executive turnover. To the extent an executive forfeits all unvested stock and option grants if she leaves the firm, deferred vesting will increase the cost (to the executive) of early exit. Using pay Duration proposed in Gopalan, et al., (forthcoming) as a measure of the length of managerial pay, we find that CEOs and non-CEO executives with longer pay Duration are less likely to leave the firm voluntarily. Employing the vesting of a large prior-year stock/option grant as an instrument for Duration, we find the effect to be causal. CEOs with longer pay Duration are also less likely to experience a forced turnover and the sensitivity of forced CEO turnover to firm performance is significantly lower in firms that offer longer duration pay. Overall, our study highlights a strong link between compensation design and turnover for top executives. Finally, in chapter 3, we develop and test a new explanation for forced CEO turnover. Investors may disagree with management on the optimal course of corporate actions due to heterogeneous prior beliefs. Such disagreement may be persistent and costly to firms, and thus create incentives for firms to replace CEOs who investors tend to disagree with. We use this logic to develop and provide evidence for three hypotheses. First, firms with higher investor-management disagreement are more likely to fire their CEOs, and this effect is more pronounced in more-financially-constrained firms as well as those with less-entrenched CEOs and stronger shareholder governance. Second, firms are more likely to hire an external CEO as a successor if investor-management disagreement with the departing CEO is higher. Third, investor-management disagreement declines following forced CEO turnover. Thus, the evidence sheds new light on how disagreement between management and investors shapes one important aspect of corporate governance--the replacement of CEOs.

Download or read book Essays on CEO Turnover Succession and Compensation written by Hongxia Wang and published by . This book was released on 2009 with total page 155 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is a series of study on CEO turnover, succession, and compensation. I investigate how the Sarbanes-Oxley Act (SOX) affects CEO tenure and the characteristics of CEO turnover. I hypothesize that boards tend to appoint younger (older) CEOs in firms with high (low) managerial discretion. I examine the role of managerial discretion in setting CEO pay at succession. This study enriches existing research on managerial discretion and succession by linking CEO bargaining power at succession with the theory of managerial discretion.

Download or read book Essays on Employee Turnover written by Jonathan R. Peterson and published by . This book was released on 2011 with total page 146 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is a collection of theoretical works discussing the relationship between various human resource policies and employee retention. I build my models on a turnover mechanism motivated by workers' private information about their feeling toward their current employer. Worker's use this private information s when deciding whether to continue working for that institution. This turnover mechanism provides interesting insights into various employment and compensation practices. This dissertation discusses the interactions of turnover with pay systems, promotion and firm sponsored training.

Download or read book Essays on Empirical Investigations of Management Turnover and Its Relations with Stock Returns Performance and Financial Policy written by Seksak Jumreornvong and published by . This book was released on 1992 with total page 210 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Executive Compensation Empirical Essays on the Antecedents and the Consequences and the Role of Executive Personality written by Steffen Florian Burkert and published by BoD – Books on Demand. This book was released on 2023-03-10 with total page 233 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Complex Compensation Empirical Essays on the Impact of Compensation Design on Firm Performance Turnover and Organizational Justice written by Tobias Oberpaul and published by BoD – Books on Demand. This book was released on 2024-01-19 with total page 202 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Essays on Top Management and Corporate Behavior written by Hui-Ting Wu and published by Rozenberg Publishers. This book was released on 2010 with total page 196 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays On CEO Career Mobility And Corporate Governance Choices written by Shuo Yang and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation comprises three independent studies to examine the causes and implications of CEO and executive turnover. Chapter 1 argues that Knightian uncertainty, frequently conceptualized as "unknown unknowns," is not only an exclusive attribute of a firm's external environment but also an attribute of any managerial decision (e.g., executive turnover). This study employs minimax regret equilibrium to present a mathematical model of individual decision-making under conditions of uncertainty when the probabilities of future states are not objectively known. We propose an alternative account of senior executives' preferences under conditions of uncertainty, discussing the escalation of commitment, stigma avoidance, herding in the voluntary exit, and risk propensity; these factors have often been characterized as irrational, as they systematically violate the axioms of expected utility theory. Chapter 2 challenges the presumption of agency theory that CEOs are likely to entrench themselves unless they are forced out or raided. Building on this assumption, substantial studies have emphasized the board of directors' effectiveness in assessing leadership efficacy and removing incompetent or self-serving CEOs to eliminate agency costs. I theorize that CEO career concerns result in anticipated board interventions, which potentially contribute to agency costs. Theoretically, unnecessary board interventions may prompt more CEO departures, which disrupt organizational routines and impose managerial talent loss. I empirically examine the value-destroying implications of CEO turnover in relation to the elevated likelihood of board interventions at the firm level. This paper addresses a form of agency costs that result from CEO career concerns and CEO-board power dynamics. Chapter 3 examines executives' preferences for external job opportunities as opposed to staying conditional on relative firm performance and relative changes in firm performance. Previous tests of this theory have emphasized corporate governance's role in involuntary executive departure and executives' diminished post-departure career outcomes. The results of this study highlight the conditions under which executives are attracted to external job opportunities that are not randomly assigned to them. The findings complement our understanding of managerial labor market prospects after voluntary turnover.

Download or read book Two Essays on Forced CEO Turnover During Envy Merger Waves and Dividends written by Bader Almuhtadi and published by . This book was released on 2017 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in corporate governance written by Georg F. Altenkirch and published by . This book was released on 2007 with total page 284 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Labor and Employee Sentiment written by Paul Obermann and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: CHAPTER 1 I study the turnover of Human Resource Officers (HROs) in large U.S. corporations. While poor firm financial performance does not significantly increase the probability of turnover, another factor seems vital: Employee Sentiment. Using evaluations by current firm employees on Glassdoor.com, I show that the likelihood of HRO dismissal decreases when employee sentiment regarding the overall firm, senior leadership, career opportunities, compensation and benefits, work-life balance, or culture and values is higher. These factors seem exclusive to HRO turnover and hold no explanatory power with CEO turnover, suggesting that HROs face different factors in their performance evaluation than other Executives. An analysis of CEO and HRO turnover dynamics indicates that the probability of HRO turnover is marginally higher if the CEO was replaced recently. CHAPTER 2 We study the role of connections between CEOs and division managers in managerial career outcomes. Holding divisional and managerial characteristics constant, we find that CEOs are substantially less likely to dismiss division managers with whom they share a personal connection. Additionally, the sensitivity of turnover to divisional performance is significantly smaller for more connected division managers relative to others. These findings hold even when we consider CEO-division manager relationships that are more likely to arise for exogenous reasons, suggesting a causal role for personal connections in how managers are treated in a firm's internal labor market. Complementing this evidence,we find that division managers connected to the CEO are relatively more likely to be promoted within the firm. Turning to the external labor market, we find that dismissed division managers who were connected to the CEO fare particularly poorly in the external labor market, suggesting that the ability floor leading to the dismissal of a connected manager is particularly low. We argue that the collective evidence we present is most consistent with personal connections leading, on average, to inefficient job allocation assignments in the senior executive ranks. CHAPTER 3 Recent global market shocks and extreme volatility warrant a renewed practical interest inexecutives' strategic risk management. Risk and uncertainty in organizations has been studied in management primarily at the macro-organizational level, focusing on how firm investments take on risk to shape future capabilities and financial outcomes. Risk has also been studied in finance, with a focus more on how executives can protect the firm by reducing future financial volatility. Yet neither stream of research has been connected to micro-organizational research on how employees experience and perceive organizational conditions (e.g., climate), and how those perceptions shape employee job attitudes. Given employees are a key stakeholder of firms and are potential benefactors (or victims) of firms' risk management, we seek to bring these perspectives together. Results of our study suggest firms' strategic risk management indeed shape employees' perceptions of risk and job satisfaction. Specifically, risk-taking activities (i.e., aimed at increasing future firm returns) and risk-reducing activities (i.e., hedging) have a positive indirect effect one mployee job satisfaction (through employees' perceptions of job satisfaction). Our research builds theoretical implications by connecting multiple levels of analysis and disciplinary perspectives. Further, the practical implications of our research suggest strategic risk management not only influences financial outcomes, but also shapes employees' experiences within the firm.

Download or read book Inducements in Organizations written by Nicolas Tichy and published by BoD – Books on Demand. This book was released on 2023-03-14 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Individual and Organizational Factors Surrounding Top Executive Turnover written by Stephanie Brecht-Bergen and published by Logos Verlag Berlin GmbH. This book was released on 2018 with total page 226 pages. Available in PDF, EPUB and Kindle. Book excerpt: The author analyzes the multi-faceted phenomenon of top executive turnover from various theoretical angles and empirically shows how individual and organizational factors such as performance, compensation and gender relate to it. Managerial implications on how to deal with turnover in times of talent shortage are derived. The book contributes to turnover research in three distinct ways. From a corporate governance perspective, it inspects potential antecedents and consequences of top executive dismissal with a focus on firm performance consequences. Taking a labor economics view, it scrutinizes compensation structure as a likely antecedent of voluntary turnover. From an OB and HRM angle, it examines gender as a characteristic of top executives and possible antecedent of turnover.

Download or read book Essays on Management Turnover and Succession Planning written by Lalitha Ananthanarayanan and published by . This book was released on 2001 with total page 280 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Corporate Governance written by Lixiong Guo and published by . This book was released on 2012 with total page 203 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays in Executive Compensation written by Randy Beavers and published by . This book was released on 2015 with total page 167 pages. Available in PDF, EPUB and Kindle. Book excerpt: In essay one, we examine overconfident CEO-directors and find they attend more board meetings, are more active in nominating committees, and have more independent directorships. Attendance is higher when multiple overconfident directors are present on the board. When an overconfident board selects a new CEO after a CEO turnover, they are more likely to appoint a better prepared and more reputable CEO. Overconfident boards are also more likely to select an overconfident CEO. We also find overconfident boards exacerbate the restrained use of debt when an overconfident CEO is present, and we find evidence that the association between CEO-directors and greater CEO pay is driven solely by overconfident CEO-directors on the board. This evidence indicates overconfident CEO-directors exhibit significant influence on the board and over the firm's CEO. In essay two, I analyze the CEO incentives of inside debt in the form of deferred equity compensation in the context of M & A decisions. CEO inside debt holdings are negatively associated with the likelihood of the firm engaging in an M & A. When firms with higher levels of CEO inside debt decide to engage in an acquisition, those acquisitions are non-diversifying, relatively smaller deals, and are paid using a greater portion of stock. The evidence indicates that inside debt incentivizes CEOs to make less risky decisions for the benefit of debt holders and at the expense of shareholders. In essay three, I analyze both CEO inside debt and firm debt jointly to further investigate compensation incentives of risky decision-making and the resulting financial policy decisions concerning the debt structure of the firm. I find larger firms with high CEO inside debt tend to diversify, as calculated by the Herfindahl-Hirschman index of debt type usage. These types of firms use a higher percentage of term loans and other debt but a lower percentage of drawn credit lines and commercial loans. Larger firms with high CEO inside debt have lower interest rates on these debt instruments and shorter maturities, suggesting a more conservative financing policy with regards to debt.

Download or read book Ownership Boards of Directors and Executive Turnover in Japan written by Steven J. Johnson and published by . This book was released on 2003 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt: