Download or read book Essays in Empirical Disclosure and Compensation Contracting written by Hojun Seo and published by . This book was released on 2016 with total page 141 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is comprised of three essays relating to empirical corporate disclosure and compensation contracting. The first essay examines peer effects in corporate disclosure decisions. I define peer effects as the average behavior of a group influencing an individual group members behavior. Using instrumental variable estimation to eliminate the effects of common shocks, I find that firms are more likely to make disclosures when more peer firms do so, and the marginal effect exceeds that of most firm-specific disclosure determinants studied in the prior literature. I corroborate the existence of peer effects by providing evidence that peer effects are absent when the disclosure is non-discretionary. In cross-sectional tests, I find that peer firm disclosure has a stronger impact on a firms disclosure decisions when the degree of strategic interactions between the firm and its industry peers is higher. I also provide evidence that industry followers respond to industry leaders disclosures but not vice versa. Finally, I examine capital-market effects and find that disclosure motivated by peers is associated with improved stock liquidity. Overall, this study highlights an important disclosure determinant and suggests that peer firm disclosure shapes the corporate information environment. The second essay empirically investigates the Relative Performance Evaluation (RPE) hypothesis in CEO compensation contracts (co-authored with Sudarshan Jayaraman and Todd Milbourn). RPE theory predicts that firms filter out common performance while evaluating CEOs, and that the extent of filtering increases with the number of peers. We hypothesize that inaccurate classification of peers explains prior inconclusive evidence. Following Hoberg and Phillips (2015), we define peers based on 10-K product descriptions and find consistent evidence (i) firms on average filter out common performance, (ii) filtering increases with the number of peers, and (iii) firms completely filter out common performance in the presence of many peers. We conclude that a key identification strategy to testing RPE lies in accurately defining peers. Lastly, the third essay examines the characteristics of management earnings guidance issued right before the compensation committee meetings (co-authored with Xiumin Martin and Jun Yang). Corporate boards determine performance metric for CEOs annual incentive plans at compensation committee meetings at the beginning of a fiscal year. We find that management earnings guidance issued immediately before the meetings tends to be lower than the prevailing consensus analyst forecasts. This downward bias is only present when the performance metric is linked to earnings such as earnings-per-share (EPS). We do not observe downward bias when revenue serves as the performance metric. Also, pessimistic earnings guidance is more pronounced when the prevailing consensus analyst forecast is much more opportunistic. The downward bias is also greater when institutional ownership is more concentrated. Taken together, our findings suggest that managers have incentives to issue pessimistic earnings guidance before compensation committee meetings and that analyst earnings forecasts might serve as an anchor for the compensation committee to defend its choice of performance metric under shareholder pressures.
Download or read book Essays on Behavioral Aspects of the Design and Disclosure of Compensation Contracts written by and published by . This book was released on 2014 with total page 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 Voluntary Disclosure Quality Earnings Management and Executive Compensation written by Florian Eugster and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book ESSAYS IN CORPORATE FINANCE written by Edward J Kim and published by . This book was released on 2021 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation consists of three chapters that explore various aspects of corporate finance with a focus on issues related to corporate governance. Chapter 1 investigates how CEO bargaining power affects the level of CEO compensation. Contracting theories predict that CEO power plays an essential role in the pay-setting process. I provide causal empirical evidence of how changes in the bargaining power of CEOs affect the level of CEO compensation. Using the staggered adoption of the Inevitable Disclosure Doctrine (IDD) by US state courts as an exogenous shock to CEOs' bargaining power, I find that the recognition of the IDD results in significantly lower levels of CEO compensation. The effect is present only in subsamples of firms whose CEOs experience a substantial decline in their bargaining power. These results support the idea that bargaining power is the channel through which the IDD recognition decreases CEO compensation. Economic impact of the IDD is also substantial in the subsamples, ranging from 16.4% to 20.5% decline in total compensation. Examination of the structure of compensation reveals that changes in the bargaining power of CEOs reduce total current compensation and option awards. The recognition of the IDD also increases turnover-performance sensitivity and shareholder wealth. Chapter 2 examines the impact of corporate religious culture on CEO compensation structure. Recent studies document the effect of corporate culture on corporate behavior. This study examines how a firm's religious culture affects the structure of CEO compensation. Using county-level religiosity as a proxy for a firm's culture, I find that firms in highly religious counties use about 12.4% less performance-based compensation in their CEO compensation packages. I consider two characteristics of religious cultures that are likely to have implications on executive compensation: extrinsic motivation and locus of control. To determine which characteristic is driving the results, I examine how turnover decisions differ depending on religious culture of firms. If locus of control - the extent to which human effort can affect future outcomes - is driving the main result, less turnover-performance sensitivity is expected in highly religious firms. The results show that turnover-performance sensitivity does not vary according to county-level religiosity, suggesting that locus of control is not the driver behind the main result. These findings indicate that firms with highly religious cultures use less performance-based compensation because religious cultures' work ethic is less financially motivated. Lastly, Chapter 3 investigates how insider-dominance of corporate boards affect firm value. The agency literature posits that insider-dominated boards are likely to face severe agency problems. However, some theories on board control argue that insider-dominated boards are sometimes optimal for shareholders. I evaluate the theories using SOX-related board reforms in the early 2000s that presented an exogenous change in board control. Specifically, I analyze the heterogenous treatment effects based on firm characteristics that theoretically favor insider-dominated boards - firm size, proprietary knowledge, and information transparency. Preliminary results suggest that firms with theoretically optimal insider-dominated boards experienced a net increase in shareholder value when boards became independent. These results indicate that benefits of enhanced monitoring by independent boards outweighed any loss in value associated with insider control of the board.
Download or read book Essays in Empirical Financial Economics written by Xiaoying Xie and published by . This book was released on 2006 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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 Essays on Corporate Risk Governance written by Mr. Gaizka Ormazabal Sanchez and published by Stanford University. This book was released on 2011 with total page 185 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation comprises three papers on the governance of corporate risk: 1. The first paper investigates the role of organizational structures aimed at monitoring corporate risk. Proponents of risk-related governance structures, such as risk committees or Enterprise Risk Management (ERM) programs, assert that risk monitoring adds value by ensuring that corporate risks are managed. An alternative view is that such governance structures are nothing more than window-dressing created in response to regulatory or public pressure. Consistent with the former view, I find that, in the period between 2000 and 2006, firms with more observable risk oversight structures exhibit lower equity and credit risk than firms with fewer or no observable risk oversight structures. I also provide evidence that firms with more observable risk oversight structures experienced higher returns during the worst days of the 2007-2008 financial crisis and were less susceptible to market fluctuations than firms with fewer or no observable risk oversight structures. Finally, I find that firms without observable risk oversight structures experienced higher abnormal returns to recent legislative events relating to risk management than firms with observable risk oversight structures. 2. The most common empirical measure of managerial risk-taking incentives is equity portfolio vega (Vega), which is measured as the dollar change in a manager's equity portfolio for a 0.01 change in the standard deviation of stock returns. However, Vega exhibits at least three undesirable features. First, Vega is expressed as a dollar change. This implicitly assumes that managers with identical Vega have the same incentives regardless of differences in their total equity and other wealth. Second, the small change in the standard deviation of returns used to calculate Vega (i.e., 0.01) yields a very local approximation of managerial risk-taking incentives. If an executive's expected payoff is highly nonlinear over the range of potential stock price and volatility outcomes, a local measure of incentives is unlikely to provide a valid assessment of managerial incentives. Third, Vega is measured as the partial derivative of the manager's equity portfolio with respect to return volatility. This computation does not consider that this partial derivative also varies with changes in stock price. The second paper develops and tests a new measure of managerial risk-taking equity incentives that adjusts for differences in managerial wealth, considers more global changes in price and volatility, and explicitly considers the impact of stock price and volatility changes. We find that our new measure exhibits higher explanatory power and is more robust to model specification than Vegafor explaining a wide range of measures of risk-taking behavior. 3. The third paper examines the relation between shareholder monitoring and managerial risk-taking incentives. We develop a stylized model to show that shareholder monitoring mitigates the effect of contractual risk-taking incentives on the manager's actions. Consistent with the model, we find empirically that the positive association between the CEO's contractual risk-taking incentives and risk-taking behavior decreases with the level of shareholder monitoring. Furthermore, consistent with the board anticipating and optimally responding to shareholder monitoring, boards of firms exposed to more intense monitoring design compensation contracts that provide higher incentives to take risks. Overall, our results suggest that, when evaluating risk-taking incentives provided by a compensation contract, it is important to account for the firm's monitoring environment.
Download or read book Essays on the Economic Consequences of Mandatory IFRS Reporting around the world written by Ulf Brüggemann and published by Springer Science & Business Media. This book was released on 2011-08-31 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ulf Brüggemann discusses and empirically investigates the economic consequences of mandatory switch to IFRS. He provides evidence that cross-border investments by individual investors increased following the introduction of IFRS.
Download or read book American Doctoral Dissertations written by and published by . This book was released on 2002 with total page 776 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Dissertation Abstracts International written by and published by . This book was released on 2008 with total page 618 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book BDEDM 2023 written by Misra Anuranjan and published by European Alliance for Innovation. This book was released on 2023-06-13 with total page 1138 pages. Available in PDF, EPUB and Kindle. Book excerpt: Proceedings of the 2nd International Conference on Big Data Economy and Digital Management (BDEDM 2023) supported by University Malaysia Sabah, Malaysia, held on 6th–8th January 2023 in Changsha, China (virtual conference). The immediate purpose of this Conference was to bring together experienced as well as young scientists who are interested in working actively on various aspects of Big Data Economy and Digital Management. The keynote speeches addressed major theoretical issues, current and forthcoming observational data as well as upcoming ideas in both theoretical and observational sectors. Keeping in mind the “academic exchange first” approach, the lectures were arranged in such a way that the young researchers had ample scope to interact with the stalwarts who are internationally leading experts in their respective fields of research. The major topics covered in the Conference are: Big Data in Enterprise Performance Management, Enterprise Management Modernization, Intelligent Management System, Performance Evaluation and Modeling Applications, Enterprise Technology Innovation, etc.
Download or read book Essays on the Financial Reporting and Price Implications of Managerial Ownership and Contingent Consideration in Business Acquisitions written by Kofi Appiah Okyere and published by . This book was released on 2005 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Bulletin of the Atomic Scientists written by and published by . This book was released on 1955-04 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Bulletin of the Atomic Scientists is the premier public resource on scientific and technological developments that impact global security. Founded by Manhattan Project Scientists, the Bulletin's iconic "Doomsday Clock" stimulates solutions for a safer world.
Download or read book Earnings Management written by Joshua Ronen and published by Springer Science & Business Media. This book was released on 2008-08-06 with total page 587 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?
Download or read book Two Essays on Corporate Finance written by Sen Li and published by . This book was released on 2004 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt:
