Explaining Executive Pay: The roles of managerial power and complexitySpringer Science & Business Media, 2007 M12 31 - 207 páginas The idea of studying executive pay was born in a lecture on option valuation in spring 2002 at the Norwegian School of Economics and Business Administration NHH. At that time, I started wondering how companies that had granted large amounts of stock options to their executives would react to the sharp decreases in share prices that could be observed since 2000. Based on this interest, I wrote my NHH master thesis about "Employee stock options and falling share prices" investigating a sample of Norwegian IT companies. These companies were especially likely to both have granted substantial amounts of options and suffered from severe declines in share prices. The topic of executive pay continued to attract my interest, mainly because I felt that it offered opportunities to make a real contribution to academic researchers and policy makers alike. In summer 2002, I wrote my master thesis at the University of St. Gallen HSG. I investigated the determinants of executive stock option plan adoptions of Swiss sto- listed companies. Major results were that both large outside shareholders and CEO duality influenced whether companies would adopt stock option plans. At that time, very little information about executive pay was disclosed in Switzerland. However, the Swiss Stock Exchange SWX issued new listing guidelines that required companies to disclose detailed information on Corporate Governance starting from the annual report 2002 to be published in 2003. |
Contenido
The compensation setting process | 9 |
Research review on executive pay | 13 |
Research review on director pay | 48 |
Can powerful managers extract rents? | 66 |
2 | 76 |
Research methods | 102 |
Research results | 119 |
Discussion | 159 |
Conclusions | 169 |
Appendix questionnaire | 179 |
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Explaining Executive Pay: The roles of managerial power and complexity Lukas Hengartner Sin vista previa disponible - 2006 |
Términos y frases comunes
0.10 level two-tailed agency theory awards Black-Scholes board members board memberships board of directors CEO duality CEO equity CEO pay CEO power CEO tenure compensation committee compensation contracts compensation levels compensation mix Conyon Descriptive statistics determinants of executive director compensation dummy variable effects empirical equity compensation equity-based compensation evidence executive compensation executive ownership executive pay executive power F-statistics Finkelstein and Hambrick firm performance firm's Gomez-Mejia incentives increase influence information asymmetry interdependent directors interlocks internationalization Jensen and Murphy Journal level and structure managerial power market uncertainty MCHF Means significant measures median negatively associated non-executive directors option grants pay levels pay mix pay structure pay-performance sensitivity politicized environment positively associated positively related power variables Principal component analysis prior regressions relationship repricing restricted stock risk Ryan and Wiggins sample shares significantly stock options studies suggests Swiss Table top executives top management team total CEO compensation total compensation Yermack Zajac
Pasajes populares
Página 15 - We define an agency relationship as a contract under which one or more persons (the principal(s)) engage another person (the agent) to perform some service on their behalf which involves delegating some decision making authority to the agent.
Página 69 - The separation of ownership from control produces a condition where the interests of owner and of ultimate manager may, and often do, diverge, and where many of the checks which formerly operated to limit the use of power disappear.
Página 110 - Statement), no single set of characteristics is universally applicable in determining the industry segments of all enterprises, nor is any single characteristic determinative in all cases. Consequently, determination of an enterprise's industry segments must depend to a considerable extent on the judgment of the management of the enterprise.
Página 67 - Strategically contingent sub-units are the most powerful, because they are the least dependent on other sub-units and can cope with the greatest systemic uncertainty, given that the sub-unit is central to the organization system and not easily substitutable. The theory assumes that the sub-units are unitary and cohesive in nature whereas, in fact, they are more likely to be hierarchical, with a more or less problematic culture of consent and dissent.
Página 87 - Discouraging board members from selling this equity is important so that holdings will accumulate to a significant size over time. Oversized boards. Keeping boards small can help improve their performance. When boards get beyond seven or eight people they are less likely to function effectively and are easier for the CEO to...
Página 15 - The conflict of interest between shareholders of a publicly owned corporation and the corporation's chief executive officer (CEO) is a classic example of a principal-agent problem. If shareholders had complete information regarding the CEO's activities and the firm's investment opportunities, they could design a contract specifying and enforcing the managerial action to be taken in each state of the world. Managerial actions and investment opportunities are not, however, perfectly observable by shareholders;...
Página 68 - Most definitions of power include an element indicating that power is the capability of one social actor to overcome resistance in achieving a desired objective or result.
Página 79 - Greenmail refers to the agreement between a large shareholder and a company in which the shareholder agrees to sell his stock back to the company, usually at a premium, in exchange for the promise not to seek control of the company for a specified period of time.
Página 42 - Under tournament theory executive compensation is set to provide incentives, not to the executives themselves, but rather to their subordinates. The...