Download or read book The Dual Role of Peer Groups in Executive Pay written by Robert F. Göx and published by . This book was released on 2008 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Inside the Black Box written by Michael W. Faulkender and published by . This book was released on 2014 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper considers the features of the newly disclosed compensation peer groups and demonstrates their significant role in explaining variations in chief executive officer (CEO) compensation beyond that of other benchmarks such as the industry-size peers. After controlling for industry, size, visibility, CEO responsibility, and talent flows, we find that firms appear to select highly paid peers to justify their CEO compensation and this effect is stronger in firms where the compensation peer group is smaller, where the CEO is the chairman of the board of directors, where the CEO has longer tenure, and where directors are busier serving on multiple boards.
Download or read book Position Power and Demand for CEOs written by Vijaya B. Marisetty and published by . This book was released on 2016 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: We extend Hayes and Schaefer (2009) model to derive testable hypotheses for the existence of the peer-group effect in the CEO labor market. Our model predicts higher growth in relative compensation for CEOs under higher firm-level productivity. The model also predicts increase in peer-group effect in the presence of investor myopia. We use CEO promotion to the dual role of CEO-Chairman as a control for discrete change in her power, primary determinant of compensation according to Managerial Power hypothesis (Bebchuk et al. (2002); Bebchuk and Fried (2004)), and position, primary determinant according to Optimal Contracting hypothesis (Rosen (1982); Grossman and Hart (1983)). We empirically test our model predictions using a difference-in-difference approach by comparing compensation histories of 979 U.S. CEOs who got promoted to CEO-Chairmen role during their tenure and nearest neighborhood peer CEOs who got directly appointed as CEO-Chairmen. Our results, after several robustness checks, are consistent with our model that peer-group effect in CEO labor market exists even after controlling for CEOs' power and position proxies.
Download or read book Pay Without Performance written by Lucian A. Bebchuk and published by Harvard University Press. This book was released on 2004 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. 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 The Professional Standards of Executive Remuneration Consultants written by Calvin Jackson and published by Taylor & Francis. This book was released on 2023-05-01 with total page 231 pages. Available in PDF, EPUB and Kindle. Book excerpt: Love them or hate them, executive remuneration consultants are key players in remuneration committees’ pay determination processes. This book concerns the professional standards of executive remuneration consultants (and their ‘in-house’ counterparts; for example, Human Resources Director and Head of Reward) in providing remuneration committee advisory services. The author is a 25-year ‘veteran’ executive remuneration consultant, having worked around the world in this capacity (particularly in the financial services sector). This book is based on a qualitative empirical doctoral research exercise, involving 53 participants in the UK executive pay scene (including regulators, institutional shareholder bodies, proxy advisors, remuneration committees’ chairs/members, executive remuneration consultants and in-house executive reward specialists). The objective was to formulate conclusions that could be used to the benefit of UK practice and contribute to the relevant academic scholarship on executive remuneration consultants. The research covered 18 aspects, ranging from an examination of the independence of such consultants to whether there might be a specialised accreditation/qualification and/or licence to practise regime covering their services. It provides novel insights into this previously under-researched area of corporate governance/financial regulation. This book will be of interest to those involved in the UK executive remuneration scene, whether government, regulators or any of the other parties mentioned already (plus academics in universities and business schools). It is hoped too that overseas remuneration regimes that have respects in common with the UK’s will find this book useful.
Download or read book Obscured Transparency Compensation Benchmarking and the Biasing of Executive Pay written by Mathijs De Vaan and published by . This book was released on 2018 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: The disclosure of compensation peer groups is argued to provide shareholders with valuable information that can be used to scrutinize CEO compensation. However, research suggests that there are substantial incentives for executives and directors to bias the compensation peer group such that the CEO can extract additional rent. Analyses of eleven years of comprehensive data on compensation peer groups demonstrate that the average firm uses an upwardly biased peer group. The size of the bias is positively associated with poor firm performance and with the amount of structural ambiguity regarding the peer group that best matches the focal firm. Both of these relationships imply that firms select peer groups strategically in order to justify higher pay for the CEO. More importantly, upward bias in compensation peer groups is highly predictive of an increase in CEO compensation suggesting that there is a strong incentive for CEOs to introduce upward bias into the peer group. Finally, while average peer group bias has gone down in recent years, the predictive effect of bias on pay has gone up. These findings call into question the practical impact of recent efforts to introduce greater transparency into the process for determining executive compensation.
Download or read book Advances in Business and Management Forecasting written by Kenneth D. Lawrence and published by Emerald Group Publishing. This book was released on 2019-09-06 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: Volume 13 of Advances in Business and Management Forecasting presents state-of-the-art studies in the application of forecasting methodologies to areas such as sales forecasting, retailing, service contracts, bankruptcy prediction, executive compensation, and call center staffing.
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 Fairness of CEO Compensation written by Mehtap Aldogan Eklund and published by Springer Nature. This book was released on 2019-12-05 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt: Executive compensation and its fairness to stakeholders are topics of heated debate on platforms ranging from news forums to financial markets. This book stimulates critical thinking on executive compensation and guides academics and practitioners on the key concepts by developing a multi-faceted and multi-cultural framework. It also presents the new ‘Fair CEO Compensation,’ which uses a scientifically developed and structured stakeholder-based approach to reach optimal and fair CEO compensation, without capping bonuses or variable pay by rules and regulations. Financial, non-financial, organizational, strategic, cultural, personal, and social aspects are all taken into account in the framework. In addition to implementation guidelines and real-world examples, the book presents a checklist for businesses to measure the fairness of their CEO compensation based on the suggested framework. Moreover, the author also provides a survey template to help businesses investigate their employees’ perception of the fairness of their CEO’s compensation.
Download or read book Executive Compensation written by Edge and published by Windsor Professional Information. This book was released on 2004 with total page 564 pages. Available in PDF, EPUB and Kindle. Book excerpt: Drawing from nine of the leading compensation advisory firms in the country, Executive Compensation: The Professional's Guide to Current Issues and Practices is the first publication to bring together a number of the top practitioners and experts in the field to provide the information and insights needed to navigate within the new era of accountability and performance standards.
Download or read book Compensation Contagion written by Gonul Colak and published by . This book was released on 2017 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that increases in CEO compensation at new S&P 500 members affect CEO compensation at other firms through compensation peer benchmarking. This compensation contagion propagates via three channels. Direct competition for managerial talent forces firms to respond to peers' pay increases. Star chasing, which involves adding new S&P 500 members to compensation peer groups to justify higher pay, is associated with weak corporate governance. The peer-of-peer channel relies on indirect compensation peers and is most influential overall. Interestingly, we find minimal downward pressure on CEO compensation from companies removed from the S&P 500, confirming the asymmetric nature of contagion.
Download or read book Social Stratification written by David B. Grusky and published by Routledge. This book was released on 2018-05-04 with total page 1152 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book covers the research on economic inequality, including the social construction of racial categories, the uneven and stalled gender revolution, and the role of new educational forms and institutions in generating both equality and inequality.
Download or read book Compensation Peer Groups and Their Relation with CEO Pay written by Brian D. Cadman and published by . This book was released on 2013 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine whether companies select compensation peer groups opportunistically to increase CEO pay. Using 608 firms from the Samp;P 1500, 2,154 peer firms identified from their proxy statements, and a pool of potential peers representing the firm's labor market in which it competes for talent, we find limited evidence that firms choose peer groups opportunistically. Although firms select bigger and better performing peer firms relative to other potential peers, only size has any power in explaining CEO pay. On the other hand, inconsistent with opportunism, sample firms select peers that are more similar to them on other economic characteristics, that use the same compensation consultant and that select the sample firm as a peer. Despite subjecting our analysis to a battery of tests, and even in subsamples where opportunism is more likely at play, we find little support for the conjecture that firms strategically select peer firms to influence greater CEO pay. Our evidence is more consistent with peer firms being used to benchmark CEO pay in a competitive labor market.
Download or read book Modern Labour Economics written by Peter Sloane and published by Routledge. This book was released on 2013 with total page 398 pages. Available in PDF, EPUB and Kindle. Book excerpt: Labour economics as a discipline has changed dramatically in recent years. Gone are the days of a "job for life". These days, firms and employees are part of a less regulated, more fluid, and more international labour market. Knowledge, training, human resource development and human capital are all major factors on the contemporary scene. This new textbook is the first properly international textbook to reflect these swingeing changes. Its key areas of concentration include: the increasing importance of human capital including education and occupational choice the major subdivision of personnel economics including economic inactivity and absenteeism comparative cross country studies and the impact of globalization and migration on national labour markets equal opportunities and issues of discrimination on the basis of race, gender and disability conflict at work, including both strikes and, uniquely, individual disputes. Other issues explored include the supply and demand of labour, wages, the current role of trade unions, bargaining and conflict, and working time. The book is written in a clear, accessible way with some mathematical exposition, reflecting the text’s grounding in current microeconomic theory. The book also contains case studies designed to illuminate theoretical concepts and exercises and discussion questions to test the students understanding of the various concepts outlined in the text.
Download or read book Leadership and Governance from the Inside Out written by Robert Gandossy and published by John Wiley & Sons. This book was released on 2004-10-04 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt: At last, there’s a business leadership book that really tackles the tough issues of integrity and governance. Taking a unique approach to leadership, this book gathers the path-breaking perspectives of influential shareholder activists; opinion-leading CEOs of major firms; trailblazing, distinguished academics; and courageous regulators. The all-star roster of contributors from the corporate world and academia includes Vanguard's John Bogle, former SEC Chairman Arthur Levitt, and Harvard Business School's Rosabeth Moss Kanter. Sherron Watkins, Enron whistleblower and Time Person of the Year, shares an inside look at Enron, and Barbara Ley Toffler, former head of Arthur Andersen's Ethics Practice, paints a picture of Anderson Consulting before their fall.
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 Impression Management and the Biasing of Executive Pay Benchmarks written by Mathijs de Vaan and published by . This book was released on 2014 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the selection of peers into compensation peer groups reported by U.S. corporations. Securities and Exchange Commission (SEC) regulation requires firms to report these peer groups which are used by investors and shareholders to benchmark the compensation of CEOs. Building on a novel, dynamic analysis of more than 1,400 compensation peer groups since 2006, this paper presents new evidence that compensation peer groups are biased upwards relative to neutrally chosen “natural” peer groups. This upward bias is masked by several factors including normative selection on other criteria than compensation and the strong negative relationship between bias and the percentile at the named peer group at which the CEO is compensated. We find that adjustments to compensation peer groups are often better explained as bias-maintaining impression management than as structural adjustments to align peer groups more closely with the normative principles for peer group selection. We also find that peer group bias cannot generally be explained away as a reward for CEO talent. Our research suggests that although the SEC regulation was intended to minimize rent extraction, it has given firms a tool to manage impressions of shareholders and justify excessive pay.
