Download or read book Institutional Investors and CEO Compensation written by Jae Yong Shin and published by . This book was released on 2008 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: Institutional investors have become increasingly important as equity holders in the U.S. financial market. This book investigates the relation between the structure of CEO compensation and the composition of firms' institutional ownership in terms of investment horizons and legal type. Consistent with regulators' and investors' concerns that myopic investment behavior by some institutional investors leads managers to fear an earnings disappointment, I provide evidence that in companies with more shares held by institutions with short-term investment horizons, executive compensation is structured with preference towards these short-term institutions' preferences (e.g., more use of stock options that do not need to be expensed and larger annual bonus penalties for missing quarterly earnings benchmarks). By documenting one potential consequence of firms' ownership structure that related to the various classes of institutional shareholders in term of investment horizons, this book should be of interest to regulators, investors, board of directors, and academicians who may need to identify and mitigate undue influences from short-sighted institutional investors.

Download or read book Institutional Investors and Executive Compensation written by Jay C. Hartzel and published by . This book was released on 2008 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Due to institutional investors' increasing ownership and interest in corporate governance, we hypothesize that the presence of institutional investors is associated with certain executive compensation structures. We find a significantly negative relation between the level of compensation and the concentration of institutional ownership, suggesting that institutions serve a monitoring role in the shareholder-manager agency problem. We further find a significantly positive relation between the pay-for-performance sensitivity of executive compensation and both the level and concentration of institutional ownership.These results suggest that the institutions act as a complement rather than a substituteto incentive compensation in mitigating the agency problem.

Download or read book Pay Without Performance written by Lucian Bebchuk and published by . This book was released on 2004-11-22 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt: A powerful critique of executive compensation and corporate governance, "Pay Without Performance" points the way to restoring corporate integrity and improving corporate performance.

Download or read book Institutional Investment Horizons and CEO Compensation written by Jae Yong Shin and published by . This book was released on 2008 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: I investigate the relation between the structure of CEO compensation and the investment horizons of a firm's institutional investors and find results consistent with the assertion that short-sighted institutions' focus on short-term earnings leads firms to grant more options with higher sensitivity to stock price. In contrast, the percentage holdings of long-term investors are negatively correlated with the use of options and the sensitivity of total CEO equity incentives to changes in stock price. Further results suggest that firms with higher short-term institutional ownership are more concerned about a negative earnings surprise and that when determining annual bonuses, they punish their CEOs more severely. In total, the analyzes provide evidence that the investment horizon of institutional investors is associated with firms' CEO compensation policies.

Download or read book Essays on the Relation Between Institutional Ownership Composition and the Structure of CEO Compensation written by Chae-yong Sin and published by . This book was released on 2006 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Research Handbook on Executive Pay written by John S. Beasley and published by Edward Elgar Publishing. This book was released on 2012-01-01 with total page 553 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research on executive compensation has exploded in recent years, and this volume of specially commissioned essays brings the reader up-to-date on all of the latest developments in the field. Leading corporate governance scholars from a range of countries set out their views on four main areas of executive compensation: the history and theory of executive compensation, the structure of executive pay, corporate governance and executive compensation, and international perspectives on executive pay. The authors analyze the two dominant theoretical approaches – managerial power theory and optimal contracting theory – and examine their impact on executive pay levels and the practices of concentrated and dispersed share ownership in corporations. The effectiveness of government regulation of executive pay and international executive pay practices in Australia, the US, Europe, China, India and Japan are also discussed. A timely study of a controversial topic, the Handbook will be an essential resource for students, scholars and practitioners of law, finance, business and accounting.

Download or read book The Impact of Domestic Institutional Investors and Foreign Investors on CEO Compensation and Firm Performance in Family Firms written by Cheng-Jen Huang and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: There has been a widespread public attention and academic interest on family ownerships in emerging Asian countries. Although family ownerships can lead to direct and effective monitoring of managerial discretion and lower principal-agent costs, they also want to increase corporate performance. Therefore, they encourage domestic institutional investors and foreign investors to invest their firms to provide professional knowledge and international experience. This study examines how domestic institutional investors and foreign investors influence CEO compensation system in Asian family firms. I collected 1,387 listed firm-year observations of family firms in Taiwan from 1999 to 2005. The results indicate that family firms tend not to use compensation as an incentive tool for CEOs to achieve performance. However, domestic institutional ownerships and foreign ownerships enhance companies by providing incentives to CEOs to improve firm performance. In addition, foreign investors push companies to provide more incentives to CEOs than those provided by institutional investors.

Download or read book Corporate Governance Strengthening Latin American Corporate Governance The Role of Institutional Investors written by OECD and published by OECD Publishing. This book was released on 2011-07-01 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report reflects long-term, in-depth discussion and debate by participants in the Latin American Roundtable on Corporate Governance.

Download or read book Institutional Investors and Executive Compensation written by Jay C. Hartzell and published by . This book was released on 2002 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: We find that institutional ownership concentration is positively related to the pay-for-performance sensitivity of executive compensation and negatively related to the level of compensation, even after controlling for firm size, industry, investment opportunities and performance. These results suggest that the institutions serve a monitoring role in mitigating the agency problem between shareholders and managers. Additionally, we find that clientele effects exist among institutions for firms with certain compensation structures, suggesting that institutions also influence compensation structures through their preferences.

Download or read book Institutional Monitoring and REIT CEO Compensation written by Zhilan Feng and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Our objective in this paper is to investigate the relationship between institutional ownership and CEO compensation structure of REITs. Based on detailed analyses of data on institutional ownership, performance, CEO and board characteristics over the 10 year period 1998-2007, we find significant evidence that large institutions influence governance through CEO compensation -- greater institutional ownership is associated with greater emphasis on incentive-based compensation (higher pay-performance sensitivity of CEO compensation), and higher cash and total compensation for CEOs. Further, we find that institutions are less active when managers are performing in a superior fashion. Two important conclusions emerge from the analysis. First, similar to unregulated firms, institutional owners do act as monitors in REITs. Broadly, this result suggests that governance is necessary for REITs. Second, institutional investors set a high pay-performance sensitivity for CEOs, but are willing to pay higher cash compensation to induce managers to take risk.

Download or read book Differences in CEO Compensation Under Institutional and Large Shareholder Ownership written by Onur Kemal Tosun and published by . This book was released on 2019 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using the most recent data available, I examine the influence of large shareholders and institutional investors on different components of CEO compensation. Increased large shareholder ownership reduces total pay and current elements of incentive compensation, i.e. option, stock, and bonus pay, while institutional investors lower long-term incentive pay, i.e. pension, deferred pay, stock incentive pay. These findings are consistent with the managerial agency theory and the substitution of incentive pay by institutional monitoring. The results are more pronounced for higher levels of ownership, and firms with weak governance, smaller boards, less financial distress, tenured CEO, multiple segments, and free cash-flow.

Download or read book Responsible Executive Compensation for a New Era of Accountability written by Peter T. Chingos and published by John Wiley & Sons. This book was released on 2004-04-12 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt: A definitive road map to help companies assess and refine their executive reward strategies. Responsible pay has become inextricably linked with corporate governance and long-term shareholder value creation. Responsible Executive Compensation for a New Era of Accountability shows you how to revamp your executive compensation programs to drive shareholder value creation while adhering to the high standards of the new corporate governance environment. Packed with case studies, diagnostics, and contributions from world-renowned experts in executive compensation, this vital resource offers a comprehensive overview of the critical issues affecting executive compensation practice and theory during this new era. Order your copy today!

Download or read book Do Institutional Investors Really Reduce Executive Compensation whilst Raising Incentives written by Gavin Smith and published by . This book was released on 2013 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Hartzell and Starks (2003) [HS] report that firms with more concentrated institutional investors pay executives less and make this pay more sensitive to performance. In an extended data set covering 1992 to 2010, we find that institutional concentration has no such effects when we control for firm size with a logarithmically transformed market capitalization instead of HS's raw market capitalization. This holds both in the long-run time-series and in the panel analysis. Firms that HS consider monitored do not seem to have better control of managerial compensation or performance than their unmonitored counterparts. Our results are, on the whole, inconsistent with any form of concentrated institutional monitoring.

Download or read book Looking Back Looking Forward Recommendations on Majority Voting Section 404 and Executive Compensation written by Council of Institutional Investors-National Association of Corporate Directors and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Will the Real Monitors Please Stand Up written by Gavin Smith and published by . This book was released on 2008 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate monitoring of CEO incentives and pay levels by institutional investors. Consistent with the microstructural monitoring equilibrium of Noe (2002), we show that option-grant pay-performance sensitivity is positively related to institutional trading intensity. Trading intensity also raises CEO pay. This is to be expected with preservation of reservation CEO utility levels. Institutions with the smallest holdings and highest portfolio turnover rates have the largest positive effects on compensation levels. This is also consistent with Noe's equilibrium. Our OLS results are robust to firm random and fixed firm effects and potential endogeneity problems.

Download or read book Institutional Investors Managerial Incentives and Firms Risk Profiles written by Hursit S Celil and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation, I study the influence of monitoring by institutional investors on corporate behavior within the context of CEO compensation-based incentives. I find that institutional investors provide an executive with higher levels of compensation sensitivity with respect to a firm0́9s equity price (Delta). In contrast to prior literature, however, once I control the dynamic nature of the data, institutional investors do not affect compensation sensitivity with respect to a firm0́9s equity risk (Vega). Instead, I find that institutional investors appear to influence the risk profile of firm through the firm0́9s investment, financing and diversification policy choices even after I control for the CEO's compensation structure. The results suggest that compensation-related incentives to increase risk (i.e. vega) and monitoring by institutional investors are substitutes of each other in that both can offset the managerial incentives to reduce risk that stem from greater levels of compensation delta. These results are robust to potential endogeneity problems that may arise due to the dynamic nature of panel data. The electronic version of this dissertation is accessible from http://hdl.handle.net/1969.1/149301

Download or read book Institutional Investor Preferences and Executive Compensation written by Joseph A. McCahery and published by . This book was released on 2011 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: