Cross-sectional determinants of an executive performance metric index

2015 ◽  
Vol 41 (4) ◽  
pp. 396-404
Author(s):  
John Robinson
Keyword(s):  
Performance Metrics ◽  
Growth Options ◽  
Marginal Tax Rate ◽  
Cross Sectional ◽  
Content Type ◽  
Tax Rate ◽  
Executive Performance ◽  
Performance Metric ◽  
Performance Benchmarks ◽  
Stock Market Valuation

Purpose – Performance-based executive compensation has been well studied in the academic literature but relatively little attention has been paid to the performance metrics disclosed by corporations in their proxy statements. The paper aims to discuss this issue. Design/methodology/approach – Using these statements from a large sample of US firms from 1996 to 2005, the author constructs an accounting-based-metric index based on the inclusion or exclusion of performance benchmarks from five categories. Findings – The author finds firm rely more heavily on accounting-based evaluation when their stock market valuation is low. Larger firms, firms with a high marginal tax rate, and firms with low earnings per share are more likely to use accounting-based pay, levered firms are not more or less likely. Originality/value – These results are consistent with accounting-based pay being used by firms with fewer intangible assets, smaller unrealized growth options, and more established lines of business.

Visualization of tax avoidance and tax rate convergence

2019 ◽  
Vol 27 (5) ◽  
pp. 695-724 ◽  
Author(s):  
Chika Saka ◽  
Tomoki Oshika ◽  
Masayuki Jimichi
Keyword(s):  
Tax Avoidance ◽  
Tax Rates ◽  
Cross Sectional ◽  
Effective Tax Rates ◽  
Accounting Data ◽  
Content Type ◽  
Tax Rate ◽  
Objective Evidence ◽  
New Perspective ◽  
Convergence Trend

Purpose This study aims to explore the evidence of the probability of firms’ tax avoidance and the downward convergence trend of national statutory tax rates and firms’ effective tax rates. Design/methodology/approach This research employs exploratory data analysis using interactive data manipulation and visualization tools, namely, R with SparkR, dplyr, ggplot2 and googleVis (GeoChart and Motion Chart) packages. This analysis is based on the world-scale accounting data of all listed firms from 148 countries spanning 30 years. Findings The results reveal the following: three types of evidences on probability of firms’ tax avoidance, showing a non-random distribution of firms’ effective tax rates and return on assets, cross-sectional variation of firms’ effective tax rates in each country, and the trend of difference between effective tax rates and statutory tax rates, and the downward convergence trend of statutory tax rates and firms’ effective tax rates. Practical implications The results highlight the prominent issues of world-scale tax avoidance and tax rate competition and facilitate a collaborative discussion between laymen and professionals using objective evidence. Originality/value A novel methodology is adopted through the visualization of world-scale accounting data, which can facilitate a new perspective, revealing unexpected patterns and trends in otherwise hidden information. This study also highlights the importance of global consideration of firms’ tax avoidance and tax rate competition, using objective evidence.

Modeling the performance of healthcare construction projects

2019 ◽  
Vol 26 (9) ◽  
pp. 2023-2039
Author(s):  
Karim A. Iskandar ◽  
Awad S. Hanna ◽  
Wafik Lotfallah
Keyword(s):  
Mathematical Model ◽  
Performance Metrics ◽  
Project Performance ◽  
The Body ◽  
Assessment Tools ◽  
Healthcare Sector ◽  
High Tech ◽  
Relative Importance ◽  
Content Type ◽  
Performance Metric

Purpose Healthcare-sector projects are some of the most complex in modern practice due to their reliance on high-tech components and the level of precision they must maintain. Existing literature in healthcare performance specifically is scarce, but there is a recent increasing trend in both healthcare construction and a corresponding trend in related literature. No previously existing study has derived weights (relative importance) of performance metric in an objective, data-based manner. The purpose of this paper is to present a newly developed mathematical model that derives these weights, free of subjectivity that is common in other literature. Design/methodology/approach This paper’s model considers 17 exceptional projects and 19 average projects, and reveals the weights (or relative importance) of ten performance metrics by comparing how projects relate to one another in terms of each metric individually. It solves an eigenvalue problem that maximizes the difference between average and exceptional project performances. Findings The most significant weight, i.e. the performance metric which has the greatest impact on healthcare project performance, was request for information per million dollars with a weight of 16.07 percent. Other highly weighted metrics included construction speed and schedule growth at 13.08 and 12.23 percent, respectively. Rework was the least significant metric at 3.61 percent, but not all metrics of quality had low ratings. Deficiency issues per million dollars was weighted at 11.61 percent, for example. All weights derived by the model in this paper were validated statistically to ensure their applicability as comparison and assessment tools. Originality/value There is no widely accepted measure of project performance specific to healthcare construction. This study’s contribution to the body of knowledge is its mathematical model which is a landmark effort to develop a single, objective, unified project performance index for healthcare construction. Furthermore, this unified score presents a user-friendly avenue for contractors to standardize their productivity tracking – a missing piece in the practices of many contractors.

Depreciation rules and small business longevity

2014 ◽  
Vol 3 (1) ◽  
pp. 10-32 ◽  
Author(s):  
Don Bruce ◽  
John Deskins ◽  
Tami Gurley-Calvez
Keyword(s):  
Small Business ◽  
Small Businesses ◽  
Recovery Period ◽  
Business Activity ◽  
Initial Attempt ◽  
Marginal Tax Rate ◽  
Policy Makers ◽  
Content Type ◽  
Tax Rate ◽  
The Usa

Purpose – When a small business purchases a capital asset, its cost for tax purposes is spread over the useful life of the asset through the process of depreciation. It has become common in the USA for policy makers to enhance depreciation rules in an effort to increase business investment in a less-costly manner than across-the-board marginal tax rate cuts. Indeed, short-term depreciation policies are often billed by policy makers as a way to save America's small businesses. However, little is known about the actual effects of depreciation policies on small business activity. This paper aims to discuss these issues. Design/methodology/approach – In this initial attempt to test the political claims regarding the importance of depreciation rules, the paper uses a 12-year panel of tax returns for Schedule C sole proprietors to empirically examine whether more generous depreciation policies influence small business activity at the extensive margin. Specifically, the paper estimates a series of multivariate models to explain sole proprietors’ decisions to remain in business as functions of their financial, demographic, and tax situations, including measures of the present discounted value (PDV) of a stream of tax deductions for depreciated capital under various rule structures. Findings – Throughout the analysis, the authors are unable to find evidence that favorable depreciation rules lead to greater rates of entrepreneurial longevity among Schedule C sole proprietors. Originality/value – Discrete choice results suggest that increases in the PDV of tax reductions from depreciation (e.g. depreciating the value earlier in the recovery period) might actually lead to higher probabilities of small business exit, while survival analysis finds no clear influence of depreciation on spells of small business activity.

Labor supply responses to income tax free and bracket expansions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Panayiota Lyssiotou ◽  
Elena Savva
Keyword(s):  
Labor Supply ◽  
Income Taxation ◽  
Foreign Workers ◽  
Tax Rates ◽  
Marginal Tax Rate ◽  
Men And Women ◽  
Content Type ◽  
Tax Rate ◽  
Marginal Tax Rates ◽  
Males And Females

PurposeAn important concern of economic policy analysis is how income taxes affect labor supply since this is crucial in assessing the efficiency costs of taxation and designing labor income taxation. The focus in the literature has been mostly to study the responses of high earners and women. The authors contribute to this literature by focusing more on how middle earners respond to financial incentives and whether the responses are different between men and women.Design/methodology/approachThe authors exploit substantial expansions in the level of individual income exempt from taxation and taxed at a lower marginal tax rate while the schedule of marginal tax rates remained the same. The authors adopt an empirical framework that is similar to Bosch and van der Klaauw (2012) and condition on the effects of other factors, such as inflows of foreign workers that may have affected the wages, participation and working hours of native males and females. The authors also conduct various sensitivity analyses to examine the robustness of the estimates.FindingsThe authors find robust evidence that the tax reforms increased the wages of medium and high educated married males and females significantly. They also had a positive impact on work participation that was more substantial for married women, especially the medium educated. The authors estimate significant positive own wage labor supply elasticities that are small and about the same for men and women when the authors condition on the labor outcome effects of inflows of EU and non-EU foreign workers, which changed the skill distribution of the economy and had a more significant impact on female labor outcomes. Smaller wage labor supply elasticities indicate lower disincentive effects and deadweight losses from the imposition of taxes and have implications on the design of optimal taxation of men and women.Originality/valuePrevious investigations of the labor supply responses of both men and women to a given policy change have been identified mostly by exploiting changes in joint income taxation and marginal tax rates. The authors exploit substantial expansions in the level of individual income exempt from taxation and taxed at a lower marginal tax rate while the schedule of marginal tax rates remained the same. The income effects of these reforms could be limited since the reduced marginal tax rates apply to only part of the income.

scholarly journals Do Charitable Subsidies Crowd Out Political Giving? The Missing Link between Charitable and Political Contributions

2015 ◽  
Vol 15 (1) ◽  
pp. 407-435 ◽  
Author(s):  
Bariş K. Yörük
Keyword(s):  
United States ◽  
Charitable Giving ◽  
Spillover Effects ◽  
The United States ◽  
Political Contributions ◽  
Political Organizations ◽  
Marginal Tax Rate ◽  
Cross Sectional ◽  
Charitable Contributions ◽  
Tax Rate

Abstract In the United States, charitable contributions can be deducted from taxable income making the price of giving inversely related to the marginal tax rate. However, several other types of contributions such as donations to political organizations are not tax deductible. This paper investigates the spillover effects of charitable subsidies on political giving using five cross-sectional surveys of charitable and political giving in the United States conducted from 1990 to 2001. The results show that charitable and political giving are complements. Compared with non-donors, charitable donors are more likely to donate and give more to political organizations. Increasing the price of charitable giving decreases not only charitable giving but also the probability of giving and the amount of donations to political organizations. This effect is robust under different specifications and highlights the externalities created by charitable subsidies.

Tax non-compliance among SMCs in Malaysia: tax audit evidence

2014 ◽  
Vol 15 (2) ◽  
pp. 215-234 ◽  
Author(s):  
Nor Azrina Mohd Yusof ◽  
Lai Ming Ling ◽  
Yap Bee Wah
Keyword(s):  
Negative Impact ◽  
Annual Reports ◽  
Company Size ◽  
Corporate Tax ◽  
Marginal Tax Rate ◽  
Content Type ◽  
Tax Rate ◽  
The World ◽  
Tax Audit ◽  
Tax Research

Purpose – The pervasiveness of tax non-compliance remains a serious concern to most tax authorities around the world. The negative impact of tax non-compliance on the economy and the evolving nature of the Malaysian corporate tax system have motivated this study. The purpose of this paper is to examine the determinants of corporate tax non-compliance among small-and-medium-sized corporations (SMCs) in Malaysia. Design/methodology/approach – This study used economic deterrence theory to analyze and test 375 tax-audited cases finalized by the Inland Revenue Board of Malaysia in 2011. Findings – Multiple regression results revealed that marginal tax rate, company size and types of industry exerted significant effects on corporate tax non-compliance. The services and construction industries were noted to be the predominant industries engaged in tax non-compliance. The amount of concealed income unearthed during tax audit indicates clearly that there is widespread tax non-compliance in Malaysia and the quantum of tax lost through tax non-compliance is quite high. Research limitations/implications – This study only sampled SMCs audited in 2011, hence, care has been exercised in generalizing the findings. Practical implications – This study affirms that marginal tax rate, company size and types of industry are the main factors influencing compliance behavior of SMCs. The findings provide important insights not only to the Malaysian tax authority, but also to tax authorities and tax researchers in other parts of the world given that tax non-compliance of SMCs is a prevalent and universal problem. For example, with regard to the finding that marginal tax rate and company size are linked to non-compliance, it can be surmised that tax authorities ought to divert resources to firms with such characteristics when conducting audits. Originality/value – Most tax research tax examining corporate tax non-compliance used financial data from annual reports to predict tax non-compliance, which are not very accurate. This study used actual tax audit cases obtained from the tax authority which are reflective of the actual situation. This study complements the scant existing literature by empirically evaluating the factors that influenced corporate tax non-compliance in a developing country like Malaysia.

Mediation of scenario planning on the reflection-performance relationship in new product development teams

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Atif Açikgöz ◽  
Gary P. Latham ◽  
Fulya Acikgoz
Keyword(s):  
Product Development ◽  
Task Performance ◽  
New Product Development ◽  
Performance Metrics ◽  
New Product ◽  
Scenario Planning ◽  
Cross Sectional ◽  
Content Type ◽  
Mediating Role

Purpose The purpose of this study is to reveal the mediating role of scenario planning between reflection and task performance in new product development (NPD) teams. Design/methodology/approach A cross-sectional research design was used to collect data from 78 NPD teams and 194 employees. The mediation analyses were conducted through the bootstrap PROCESS macro method. Findings The results of this study yielded support for two of three hypotheses. The authors found that the relationship of reflection with product development speed and new product success is mediated by scenario planning. There was no mediation of scenario planning between reflection and product development cost. Research limitations/implications These findings show how teams can capitalize on reflective thinking practices to increase NPD task performance through scenario planning. Practical implications This study provides useful guidelines for team leaders on how to accelerate product development processes and to increase the market success of a new product. Leaders should encourage their teams to review their previous performance metrics with ongoing changes in the business environments. Originality/value To the best of the authors’ knowledge, this study is the first to examine the mediating role of scenario planning on the reflection–task performance relationship in NPD teams.

Performance metrics analysis for aircraft maintenance process control

2014 ◽  
Vol 20 (2) ◽  
pp. 122-134 ◽  
Author(s):  
Kevin M. Taaffe ◽  
Robert William Allen ◽  
Lindsey Grigg
Keyword(s):  
Performance Metrics ◽  
Performance Measurements ◽  
Content Type ◽  
Root Cause ◽  
Continuous Improvement Process ◽  
Performance Metric ◽  
The Right ◽  
The Cost ◽  
And Behavior ◽  
Maintenance Process

Purpose – Performance measurements or metrics are that which measure a company's performance and behavior, and are used to help an organization achieve and maintain success. Without the use of performance metrics, it is difficult to know whether or not the firm is meeting requirements or making desired improvements. During the course of this study with Lockheed Martin, the research team was tasked with determining the effectiveness of the site's existing performance metrics that are used to help an organization achieve and maintain success. Without the use of performance metrics, it is difficult to know whether or not the firm is meeting requirements or making desired improvements. The paper aims to discuss these issues. Design/methodology/approach – Research indicates that there are five key elements that influence the success of a performance metric. A standardized method of determining whether or not a metric has the right mix of these elements was created in the form of a metrics scorecard. Findings – The scorecard survey was successful in revealing good metric use, as well as problematic metrics. In the quality department, the Document Rejects metric has been reworked and is no longer within the executive's metric deck. It was also recommended to add root cause analysis, and to quantify and track the cost of non-conformance and the overall cost of quality. In total, the number of site wide metrics has decreased from 75 to 50 metrics. The 50 remaining metrics are undergoing a continuous improvement process in conjunction with the use of the metric scorecard tool developed in this research. Research limitations/implications – The metrics scorecard should be used site-wide for an assessment of all metrics. The focus of this paper is on the metrics within the quality department. Practical implications – Putting a quick and efficient metrics assessment technique in place was critical. With the leadership and participation of Lockheed Martin, this goal was accomplished. Originality/value – This paper presents the process of metrics evaluation and the issues that were encountered during the process, including insights that would not have been easily documented without this mechanism. Lockheed Martin Company has used results from this research. Other industries could also apply the methods proposed here.

Evaluating channel partner’s performance: impact of task environments on the relevance of measurement metrics

2019 ◽  
Vol 34 (2) ◽  
pp. 488-504 ◽  
Author(s):  
Vikas Goyal ◽  
Prashant Mishra
Keyword(s):  
Performance Evaluation ◽  
Performance Metrics ◽  
Distribution Channel ◽  
Holistic Approach ◽  
Change Score ◽  
Graphical Analysis ◽  
Task Environment ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Content Type

Purpose The purpose of this paper is to develop a nuanced framework for evaluating a channel partner’s performance in distribution channel relationships. Given a channel partner’s task environment characteristics (high/low munificence, dynamism and complexity), the study examines which performance metrics (output, activity or capability) are most relevant for evaluating its performance levels effectively. Design/methodology/approach The study adopts self-administered cross-sectional survey-based research design. Matched data were collected from 252 channel partners – manager relationship dyads. The latent change score (LCS) model within SEM framework provides mean paired-differences of the relevance ratings for each metrics. This was used to assess the empirical validity of the hypothesized relationships. Findings The study demonstrates the importance of calibrating performance evaluation metrics to a channel partner’s task environment state, made possible by its holistic approach to performance evaluation. Based on an extensive analysis, it shows that no single metric is relevant within all environmental states; rather, it could be dysfunctional, a result that differs from vast majority of the literature. Research limitations/implications Investigates individual linkages between task environment dimensions and performance metrics to provide a fuller understanding of these relationships. Also provides a theoretical framework to support further research on the topic. Practical implications The study provides managerial guidelines (and extensive graphical analysis) for nuanced and dynamic evaluation of channel partners’ performance that can enable firms to identify and promote their most valuable channel partners and prevent the deterioration of others. Originality/value First one to develop and empirically validate a nuanced framework for evaluating performance of exchange partners that operate under diverse task environment states.

Growth options and relative performance evaluation

2016 ◽  
Vol 24 (1) ◽  
pp. 38-55
Author(s):  
Jianhui Huang ◽  
Ling Liu ◽  
Ingrid C. Ulstad
Keyword(s):  
Ceo Compensation ◽  
Performance Comparison ◽  
Managerial Compensation ◽  
Growth Options ◽  
Cross Sectional ◽  
Content Type ◽  
Compensation Committee ◽  
Performance Sensitivity ◽  
Non Linear ◽  
High Level

Purpose – The purpose of this study is to investigate the cross-sectional associations between growth options and the peer pay–performance sensitivity of CEO compensation. Design/methodology/approach – This study includes analytical analysis and multivariable regression analysis. Findings – It is predicted in this study that there is a non-linear concave relation between peer pay–performance sensitivity and a firm’s growth options. Results based on the executive compensation data from ExecuComp are consistent with the hypothesis presented in this study. Research limitations/implications – Future scholars need to consider the non-linear impact of growth options on peer pay–performance sensitivity when they conduct research related to CEO compensation by differentiating the company’s growth options to be at a low, medium and high level. In an industry, when a compensation committee decides on the peers for performance comparison purposes, the committee needs to make sure that the peer firms they select have similar operational environments, for example, they face similar growth options (e.g. low, medium or high) and idiosyncratic variances. Practical implications – This study contributes to the managerial compensation literature by revealing the important role growth options, as well as idiosyncratic variances, play on peer pay–performance sensitivity. The results of this study have implications for both future researchers as well as industrial practitioners. Social implications – It gives guidance on designing CEO compensation contracts. Originality/value – This is an original work from the coauthors listed on this study.

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