scholarly journals The Impact Of Outside Director Equity Holdings On The Mix Of Outside Director Compensation

2011 ◽  
Vol 27 (2) ◽  
Author(s):  
Guy McClain
Keyword(s):  
Outside Directors ◽  
Return On Assets ◽  
Director Compensation ◽  
Compensation Plans ◽  
Negatively Associated ◽  
Equity Compensation ◽  
Outside Director ◽  
The Impact ◽  
First Time ◽  
Equity Holdings

<span>This study investigates the impact outside director equity holdings have on the determinants of the mix of equity in outside director compensation plans. The analysis, conducted over a 4 year period from 1997-2000, is based on a sample of 89 first time adopters of equity compensation. The use of first time adopters attempts to control for the fact that many of the variables in the study are endogenously determined over time. The results indicate that the mix of equity is negatively associated with outside director holding, positively associated with the market-to-book ratio (a measure of the firms investment opportunities) and negatively associated with return on assets (a measure of CEO bargaining power). These findings suggest that the negotiation that takes place between the CEO and outside directors regarding governance is not only affected by the firms wanting to match the marginal productivity of directors with the opportunities of the firm, but also with the equity holdings of the directors.</span>

scholarly journals The Impact Of Outside Director Equity Compensation On Dividend Policy

2012 ◽  
Vol 28 (4) ◽  
pp. 743 ◽  
Author(s):  
Guy McClain
Keyword(s):  
Dividend Policy ◽  
Outside Directors ◽  
Equity Compensation ◽  
Positive Performance ◽  
Outside Director ◽  
Propensity To Pay ◽  
The Impact ◽  
First Time ◽  
Over Time

This study investigates the impact outside director equity compensation has on dividend policy. The analysis, conducted over a 4 year period from 1997-2000, is based on a sample of 89 first time adopters of equity compensation. The use of first time adopters attempts to control for the fact that many of the variables in the study are endogenously determined over time. The results indicate that as the percentage of equity compensation increases a firms propensity to pay dividends decreases as does the level of dividends. These results also indicate that firms with higher profitability pay a lower level of dividends. Taken together these result indicate that as managers send signals about positive performance, outside directors with a financial stake in the company decrease the level of monitoring by paying fewer dividends.

scholarly journals Family business, director compensation and board efficacy: the case of Taiwan

2013 ◽  
Vol 11 (1) ◽  
pp. 81-91
Author(s):  
Tsun-Jui Hsieh ◽  
Yu-Ju Chen
Keyword(s):  
Firm Performance ◽  
Family Business ◽  
Positive Impact ◽  
Specific Pattern ◽  
Chinese Family ◽  
Outside Directors ◽  
Director Compensation ◽  
Outside Director ◽  
The Impact

This paper investigates the impact of outside directors on firm performance during legal transitions and examines how the roles of family business and director compensation influence board efficacy. By using Taiwanese listed companies as our sample, the empirical results show that outside directors who are appointed by legal mandate have less positive impacts on firm performance than outside directors appointed voluntarily. Family business weakens the positive impact of outside director on firm performance. The evidence further suggests that director compensation contributes to firm performance, particularly when outside directors are voluntarily appointed. The findings provide western managers with an understanding of how the typical Chinese family business affects board independence. We also demonstrate and incorporate the cultural and the ownership characteristics into the analysis to present a country-specific pattern that should be informative for foreign investors who are concerned about the quality of corporate governance in East Asia.

scholarly journals Outside Director Equity Compensation And The Monitoring Of Management

2012 ◽  
Vol 28 (6) ◽  
pp. 1315 ◽  
Author(s):  
Guy McClain
Keyword(s):  
Earnings Management ◽  
Discretionary Accruals ◽  
Font Size ◽  
Outside Directors ◽  
Accounting Earnings ◽  
Stock Performance ◽  
Accounting Performance ◽  
Equity Compensation ◽  
Outside Director ◽  
First Time

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoNormal"><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-font-family: Calibri;"><span style="font-family: Times New Roman;">Using a sample of firms that are first time users of outside director equity compensation, I examine the effect of outsider director equity compensation on director monitoring by investigating firm performance and earnings management.<span style="mso-spacerun: yes;"> </span>My results, although lagged and not noticeable until year three, show that those firms that compensate outside directors with a higher percentage of equity compensation have higher stock performance, but lower accounting performance.<span style="mso-spacerun: yes;"> </span>These same firms also have lower discretionary accruals (i.e., less earnings management).<span style="mso-spacerun: yes;"> </span>These results suggest that outside directors do increase their monitoring by lowering discretionary accruals and thereby, lowering accounting earnings.<span style="mso-spacerun: yes;"> </span>In addition, this increased monitoring has a positive effect on stock performance.<span style="mso-spacerun: yes;"> </span>The results indicate that increased monitoring of accounting earnings results in lower discretionary accruals and thus lower, but more accurate earnings, and stock performance for the same period is not negatively impacted. </span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>

Director Compensation in the Banking Industry Around the Dodd-Frank Act

2021 ◽  
pp. 2150022
Author(s):  
Wikil Kwak ◽  
Xiaoyan Cheng ◽  
Burch Kealey
Keyword(s):  
Banking Industry ◽  
Negative Impact ◽  
Director Compensation ◽  
Compensation Plans ◽  
Equity Compensation ◽  
Sarbanes Oxley ◽  
The Board Of Directors ◽  
Board Monitoring ◽  
Compensation Packages ◽  
Shed Light

Directors’ monitoring and advising activities as agents were supposed to increase after the Dodd-Frank Act in 2010. The Dodd-Frank Act significantly increases the pressure on the board of directors to be more effective agents of the stockholders even after the Sarbanes-Oxley Act (2002) became effective. Director compensation, especially incentive-based compensation, is intended to align with the interests of shareholders and motivate director behavior. This paper empirically tests how banks respond to the Dodd-Frank Act by redesigning their director compensation plans. Our findings suggest that banks recognize the need for improved board monitoring by highlighting the importance of director workload and qualifications through the design of director compensation packages in the post-Dodd-Frank Act period. We also find that the negative impact of excessive director equity compensation on firm performance was attenuated after the passage of the Dodd-Frank Act. The findings of this study shed light on the rationale of director compensation policies for banking firms.

scholarly journals Quid-pro-quo exchanges of outside director defined benefit pension plans for equity-based compensation

2006 ◽  
Vol 5 (2) ◽  
pp. 155-174 ◽  
Author(s):  
CYNTHIA J. CAMPBELL ◽  
MARK L. POWER ◽  
ROGER D. STOVER
Keyword(s):  
Stock Returns ◽  
Pension Plans ◽  
Defined Benefit ◽  
Outside Directors ◽  
Corporate Board ◽  
Director Compensation ◽  
Accounting Performance ◽  
Board Of Director ◽  
Before And After ◽  
Outside Director

The independence of outside directors is critical to corporate board effectiveness. We examine a unique period in corporate governance when outside directors' defined benefit pensions are replaced with increases in equity. Firms with pension plans significantly underperform their industry in terms of stock returns. Firms terminating the pension plans in exchange for equity have significant increases in stock returns relative to their industry subsequent to the change. All samples outperform the ROA and ROE industry medians both before and after the change in compensation, indicating pressure from organized investors likely comes from stock performance, not accounting performance. Investor rights pressure and outside director compensation and not takeover risk or institutional ownership best explain firms altering outside director compensation, with board of director effectiveness improving.

scholarly journals Outside Director Equity Compensation and the Quality of Analyst Earnings Forecasts

2015 ◽  
Vol 10 (11) ◽  
pp. 13
Author(s):  
Induck Hwang ◽  
Hyungtae Kim ◽  
Sangshin Pae
Keyword(s):  
Empirical Evidence ◽  
Investment Decision ◽  
Earnings Forecasts ◽  
Financial Information ◽  
Individual Investors ◽  
Outside Directors ◽  
Director Compensation ◽  
Equity Compensation ◽  
Analyst Earnings

<p><strong>Purpose</strong><strong>:</strong> This article investigates how outside directors’ equity compensation affects the quality of analyst earnings forecasts.</p><p><strong>Design/methodology/approach:</strong> The authors implement firm clustered OLS regression with year, quarter, and industry dummies since there may exist biases from firm, year, quarter, and industry specific characteristics.</p><p><strong>Findings: </strong>Using 7,159 firm-year compensation data from ExecuComp, the authors find that the quality of analyst earnings forecasts improves when the proportion of equity compensation awarded to outside directors increases. They also separate equity compensation into stock and option. Their results show consistent improvement: more accurate and less dispersed analyst earnings forecasts. Overall, the findings suggest that the quality of analyst earnings forecasts is better when outside directors are compensated with equity compensation.<strong></strong></p><p><strong>Research limitations/implications: </strong>This study provides empirical evidence of benefit from equity compensation of outside directors in line with existing compensation studies in accounting and finance literature. Unlike a majority of the extant studies, this study examines how the composition of director compensation affects the quality of information which financial analysts produce. Consistent with an argument that equity compensation aligns the interests, outside directors with more equity compensation tend to provide financial information with better quality, the authors document that analysts are likely to provide more accurate and less disperse information.</p><p><strong>Practi</strong><strong>cal</strong><strong> </strong><strong>implications: </strong>For and board members, this study offers an implication that equity compensation could contribute to enhancing their firms’ information environment. In addition, analysts could improve their forecasting performance by following firm monitored by outside directors remunerated with equity compensation. For investors who put much emphasize on the quality of firms’ financial information, the use of equity compensation can be a useful criterion in their investment decision.</p><p><strong>Originality/value: </strong>This study provides empirical evidence of benefit from equity compensation in line with compensation studies in accounting and finance literature. Therefore, equity compensation can be a useful criterion in their decision makings for various parties, including analysts, regulators, and individual investors.</p>

scholarly journals Board Size, Board Composition and Performance: An Investigation on Turkish Banks

2016 ◽  
Vol 9 (2) ◽  
pp. 74 ◽  
Author(s):  
Ozcan ISIK ◽  
Ali Riza INCE
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Board Composition ◽  
Outside Directors ◽  
Return On Assets ◽  
Board Size ◽  
Net Interest Margin ◽  
Fixed Effects Regression ◽  
The Impact

<p>We investigate the impact of board size and board composition on performance for a sample of 30 commercial banks from 2008 to 2012 in Turkey. We measure bank performance by two alternative measures widely used in the banking literature, i.e. operating return on assets (OROA) and return on assets (ROA). Controlling for bank size, credit risk, liquidity risk, net interest margin and non-interest income, the results of panel fixed effects regression suggest that board size has a significantly positive effect on bank’s financial performance. This means that Turkish commercial banks may improve their financial performance by increasing their board size. Our findings, however, show clearly that there is no significant relationship between board composition (ratio of outside directors on the board) and banks’ financial performance.</p>

Effect of Parental Modernity on Rejection Sensitivity and Self-Esteem of Adolescents

2016 ◽  
Vol 3 (2) ◽  
Author(s):  
Ritu ◽  
Madhu Anand
Keyword(s):  
Social Development ◽  
Rejection Sensitivity ◽  
Self Esteem ◽  
The Self ◽  
Negatively Associated ◽  
Individual Modernity ◽  
The Impact ◽  
The Relationship

Parental Modernity is an important aspect for the psycho-social development of the child. The present study aims to study the effect of parental modernity on rejection sensitivity and self-esteem of adolescents and the relationship between rejection sensitivity and self-esteem. The research is carried out on a sample of 240 parents (including 120 fathers and 120 mothers) and their 120 children. For observing the impact of modernity of parents on their children, Individual Modernity Scale was used and administered on father and mother. Rejection Sensitivity Questionnaire and Self-Esteem Inventory were used to measure the rejection sensitivity and self-esteem of children (age ranges from 14 to 19 years). The results suggest that parental modernity has an effect on the rejection sensitivity and personally perceived self of the self – esteem of adolescents. Furthermore, the rejection sensitivity has been found negatively associated with self-esteem.

Relationship between big five personality model and abusive supervision

2019 ◽  
Vol 12 (2) ◽  
Author(s):  
Bibi Tahira ◽  
Naveed Saif ◽  
Muhammad Haroon ◽  
Sadaqat Ali
Keyword(s):  
Big Five ◽  
Abusive Supervision ◽  
State Universities ◽  
Big Five Personality ◽  
Big Five Model ◽  
The Impact ◽  
First Time ◽  
Supervisor Behavior ◽  
Moderating Role

The current study tries to understand the diverse nature of relationship between personality Big Five Model (PBFM) and student's perception of abusive supervision in higher education institutions of Khyber Pakhtoonkhwa Pakistan. Data was collected in dyads i.e. (supervisors were asked to rate their personality attributes while student were asked to rate the supervisor behavior) through adopted construct. For this purpose, data was collected from three government state universities and one Private Sector University. The focus was on MS/M.Phill and PhD student and their supervisors of the mentioned universities. After measuring normality and validity regression analysis was conducted to assess the impact of supervisor personality characteristics that leads to abusive supervision. Findings indicate interestingly that except agreeableness other four attributes of (PBFM) are play their role for abusive supervision. The results are novel in the nature as for the first time Neuroticism, openness to experience, extraversion and conscientiousness are held responsible for the abusive supervision. The study did not explore the demographic characteristics, and moderating role of organizational culture, justice and interpersonal deviances to understand the strength of relationship in more detail way. Keywords: Personality big five model, abusive supervision, HEIs

Gender Impact on the Enterprise Performance

2020 ◽  
pp. 54-62
Author(s):  
Oleksii V. Lyulyov ◽  
Oleksandra I. Karintseva ◽  
Andrii V. Yevdokymov ◽  
Hanna S. Ponomarova ◽  
Oleksandr O. Ivanov
Keyword(s):  
Gender Equality ◽  
Gender Gap ◽  
Gender Representation ◽  
Board Members ◽  
Enterprise Performance ◽  
World Economic Forum ◽  
Return On Assets ◽  
The World ◽  
World Economic ◽  
The Impact

The article describes the situation of gender equality in Ukraine and in the world during the last 5 years, identifies the leading countries in moving towards gender equality in various fields of life by analyzing the indicators of the Global Gender Gap Report of the World Economic Forum. These indicators include: Economic Participation and Opportunity, Educational Attainment, Health and Survival, Political Empowerment, which are the part of a single index that determines the position of countries in the overall ranking. Based on the results of this analysis, Ukraine has improved value of gender equality index, although in the overall ranking of countries Ukraine has lost its position and dropped 11 ranks lower than in 2014. This means that, among all the countries surveyed by the World Economic Forum, there are countries that are moving much faster towards gender equality than Ukraine. In addition, the article includes the investigation of the gender representation among the board members of 5 enterprises of Ukraine for 2014-2017, which represent the leading sectors of the Ukrainian economy. The dynamics of changes in the level of performance of these enterprises using the return on assets (ROA) indicator is analyzed, the relationship between the leadership of the enterprises and the value of the ROA indicator is graphically presented. The obtained results do not give a clear answer about the gender impact on the enterprise performance. The reason for this is a number of factors, such as: insufficient statistical sampling of enterprises; the selected performance indicator of enterprise activities does not fully reflect the impact of the gender factor on enterprise activities; the methodology used in the work needs improvements, or it is necessary to choose a totally new approach to the analysis of the investigated issue under study. Gender representation among board members and its impact on enterprise performance should be investigated further. Key words: gender, gender equality, enterprise board members, return on assets.

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