scholarly journals CEO Compensation in the U.S.: Are CEOs Underpaid or Overpaid ?

2018 ◽  
Vol 7 (3) ◽  
pp. 78
Author(s):  
Phillip James ◽  
Il-woon Kim
Keyword(s):  
Firm Performance ◽  
Financial Crisis ◽  
Regression Models ◽  
Ceo Compensation ◽  
Accounting Performance ◽  
Time Period ◽  
Multiple Regression Models ◽  
Before And After ◽  
The Usa ◽  
Compensation Packages

This study investigates the adequacy of CEO compensation from the perspective of using accounting measures to assess the performance of CEOs. The main objective of this research is to determine to what extent compensation packages received by American CEOs represent an underpayment of CEOs based on the performance of their firms when firm performance is defined in terms of accounting measures. CEO compensation data are obtained from Compustat, 10K SEC filings, and Forbes listing of CEO data.  The analysis covers a two-phased time period i.e., before and after the financial crisis in the USA. CEO compensation data are analyzed for the years 2004, 2005, 2006, and 2007 (pre-financial crisis) and for years 2009 to 2013 (post financial crisis). Multiple regression models consisting of six accounting performance measures are used to perform the analysis to determine the extent of CEO underpayment or overpayment. Having examined 1151 CEO compensation packages to determine if CEO underpayment exist in light of what is an overwhelming literature supporting CEO overpayment, the results show that 67.33% of the CEOs were in fact underpaid based on their firms performance, and only 32.67% (376 CEOs) were overpaid based on firm performance.

scholarly journals THE EFFECT OF CAPITAL STRUCTURE AND FINANCIAL STRUCTURE ON FIRM PERFORMANCE (An Empirical Study of The Financial Crisis 2008 and 2009 in Indonesia)

2019 ◽  
Vol 16 (2) ◽  
pp. 206-223
Author(s):  
Cressya Cesia Ansca C. Ansca ◽  
◽  
Kevin A. Suyapto ◽  
Titin Pranoto ◽  
Vania P. Gunawan ◽  
...  
Keyword(s):  
Firm Performance ◽  
Financial Crisis ◽  
Capital Structure ◽  
Global Financial Crisis ◽  
Negative Impact ◽  
Stock Exchange ◽  
Accounting Performance ◽  
Before And After ◽  
The Global Financial Crisis ◽  
The Impact

Abstract This research aims to identify the impact of capital structure on Indonesian firms’ performance, particularly on the magnitude of impact at the period prior to crisis, crisis, and the period following the crisis that happened in 2008. The Global Financial Crisis grants a chance to scrutinize the impact of crisis between capital structure and firm performance. Proxies used for capital structure are total debt to total assets, short-term debt to total assets, and long-term debt to total assets ratio. Moreover, firm performance is measured by accounting performance (Return on Asset and Return on Equity) and market performance (Price to Equity Ratio and Tobin’s Q). Samples used include all firms listed in Indonesia Stock Exchange (IDX) from the period 2004 up to 2017, excluding financial sector firms. This research posits that capital structure generally impacts firm performance negatively. The Global Financial Crisis (GFC) that happened in 2008 serves a greater negative impact of capital structure to firm performance than it is before and after crisis. This research is intended for use by firms as a perusal in managing its capital structure, for creditors in managing its lending, and for investors in investing, prominently in times of financial crisis.

scholarly journals Changes of China’s agri-food exports to Germany caused by its accession to WTO and the 2008 financial crisis

2015 ◽  
Vol 7 (2) ◽  
pp. 262-279 ◽  
Author(s):  
Zhichao Guo ◽  
Yuanhua Feng ◽  
Thomas Gries
Keyword(s):  
Time Series ◽  
Financial Crisis ◽  
Regression Models ◽  
Structural Breaks ◽  
Global Financial Crisis ◽  
Middle Part ◽  
Change Points ◽  
Content Type ◽  
The World ◽  
Before And After

Purpose – The purpose of this paper is to investigate changes of China’s agri-food exports to Germany caused by China’s accession to WTO and the global financial crisis in a quantitative way. The paper aims to detect structural breaks and compare differences before and after the change points. Design/methodology/approach – The structural breaks detection procedures in this paper can be applied to find out two different types of change points, i.e. in the middle and at the end of one time series. Then time series and regression models are used to compare differences of trade relationship before and after the detected change points. The methods can be employed in any economic series and work well in practice. Findings – The results indicate that structural breaks in 2002 and 2009 are caused by China’s accession to WTO and the financial crisis. Time series and regression models show that the development of China’s exports to Germany in agri-food products has different features in different sub-periods. Before 1999, there is no significant relationship between China’s exports to Germany and Germany’s imports from the world. Between 2002 and 2008 the former depends on the latter very strongly, and China’s exports to Germany developed quickly and stably. It decreased, however suddenly in 2009, caused by the great reduction of Germany’s imports from the world in that year. But China’s market share in Germany still had a small gain. Analysis of two categories in agri-food trade also leads to similar conclusions. Comparing the two events we see rather different patterns even if they both indicate structural breaks in the development of China’s agri-food exports to Germany. Originality/value – This paper partly originally proposes two statistical algorithms for detecting different kinds of structural breaks in the middle part and at the end of a short-time series, respectively.

Accounting and Stock Price Performance in Dynamic CEO Compensation Arrangements

2003 ◽  
Vol 78 (1) ◽  
pp. 143-168 ◽  
Author(s):  
John F. Boschen ◽  
Augustine Duru ◽  
Lawrence A. Gordon ◽  
Kimberly J. Smith
Keyword(s):  
Firm Performance ◽  
Stock Price ◽  
Ceo Compensation ◽  
Accounting Performance ◽  
Financial Gain ◽  
Price Performance ◽  
Long Run ◽  
Initial Effect ◽  
Ceo Pay

In this study we examine the long-run effects of unexpected firm performance on CEO compensation. We find that unexpectedly good accounting performance is initially associated with increases in CEO pay. However, this initial effect soon reverses, and is followed by lower CEO pay in later years. Overall, the CEO's long-run cumulative financial gain from unexpectedly good accounting performance is not significantly different from zero. In contrast, unexpectedly good stock price performance is associated with increases in CEO pay for several years. Thus, the CEO's long-run cumulative financial gain from unexpectedly good stock price performance is positive and significant.

The Effects of Competitive Environment and Strategic Factors on US Firm Performance Before and After the Global Financial Crisis

2019 ◽  
Vol 21 (1) ◽  
pp. 37-59
Author(s):  
Alexandre Teixeira Dias ◽  
Flávia Silva Monteiro Rossi ◽  
Jersone Tasso Moreira Silva ◽  
Marcos Antônio de Camargos ◽  
Julia Pinto de-Carvalho
Keyword(s):  
Firm Performance ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Competitive Environment ◽  
Before And After ◽  
Strategic Factors ◽  
The Global Financial Crisis

scholarly journals Contagion of the Subprime Financial Crisis on Frontier Stock Markets: A Copula Analysis

Economies ◽  
2019 ◽  
Vol 7 (1) ◽  
pp. 15 ◽  
Author(s):  
Wahbeeah Mohti ◽  
Andreia Dionísio ◽  
Paulo Ferreira ◽  
Isabel Vieira
Keyword(s):  
Financial Crisis ◽  
Stock Markets ◽  
Large Set ◽  
Subprime Crisis ◽  
Relative Level ◽  
Copula Models ◽  
Before And After ◽  
The Usa ◽  
International Investors ◽  
Geographical Diversification

This study assesses contagion from the USA subprime financial crisis on a large set of frontier stock markets. Copula models were used to investigate the structure of dependence between frontier markets and the USA, before and after the occurrence of the crisis. Statistically significant evidence of contagion could only be found in the European region, with the markets of Croatia and Romania being affected. The remaining European markets in our sample and the others, located in America, Middle East, Africa, and Asia, appear to have been isolated from the subprime crisis impact. These results are useful for international investors interested in enlarging the geographical diversification of their portfolios, but also for the considered countries’ policymakers who should attempt to improve the attractiveness of stock markets for domestic and foreign investors while simultaneously attempting to maintain their relative level of insulation against future foreign crises.

scholarly journals Diversification Strategy and Financial Performance of Nigeria Private Firms

2020 ◽  
Vol 8 (07) ◽  
pp. 1883-1889
Author(s):  
Ada Mac- Ozigbo ◽  
Dr. Cross Ogohi Daniel
Keyword(s):  
Firm Performance ◽  
Financial Crisis ◽  
Regression Models ◽  
Global Financial Crisis ◽  
Private Firms ◽  
Linear Regression Models ◽  
Her Family ◽  
Diversified Firms ◽  
The Impact ◽  
Better Than

The relationship between diversification and firm performance varies among institutions and over time. Less is known about the advantageousness of diversification in economy-wide crises, which have occurred frequently in recent years Using data from a recent survey, we studied nearly 400 Nigeria private firms using two different approaches panel and cross-period comparisons. The findings of both approaches show that diversified firms performed better than focused firms. This was also true during the 2008 global financial crisis. The higher the diversification level, the more positive the firm performance was. We also investigated the influence of ownership structure. Firms that are totally owned by the founding owner and his/her family tend to have unsatisfactory performance under crisis. This finding provides evidence of the increasing attention on management and governance to explain firm. Linear regression models were evaluated to test the effect of diversification on firm performance. Panel A uses profit as the dependent variable, and Panel B uses sales. For each year (2007, 2008, and 2009), two regression models were evaluated: one testing the impact of diversification and the other testing the impact of the diversification level. We found that diversified firms performed better than focused firms during the recent global financial crisis. The diversification level was positively and linearly related to performance, that is, more diversified firms performed better. Moreover, we found that private firms that are totally owned by the founding owner and his/her family performed worse under crisis.

CEO pay sensitivities in innovative firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Raghavan J. Iyengar ◽  
Malavika Sundararajan
Keyword(s):  
Firm Performance ◽  
Performance Measures ◽  
Ceo Compensation ◽  
Critical Role ◽  
Positive Association ◽  
Executive Pay ◽  
Content Type ◽  
Accounting Performance ◽  
Innovative Firms ◽  
Compensation Committees

PurposeThis study aims to investigate whether compensation committees provide the chief executive officers (CEOs) with incentives to undertake “income-decreasing” but potentially “value-enhancing” innovation expenditures. The authors specifically analyze pay–performance relationships for innovative firms relative to all other firms. This study is critical because innovation is expensive and has uncertain outcomes.Design/methodology/approachUsing alternative accounting performance measures and market performance measures, the authors estimate an econometric model of CEO compensation in innovative firms that incorporates the interaction of endogenous innovation and firm performance.FindingsThe authors document an incremental positive association between changes in accounting performance measures and CEO compensation changes in innovative firms relative to other firms. This sensitivity of executive pay to firm performance is higher for firms that innovate. These results support the hypothesis that compensation committees provide incentives to carry out risky innovation by tying executive compensation more closely to firm performance. This finding survives a battery of sensitivity tests.Practical implicationsThe implications of this study are significant. Capital needs to support risky research and development investments (Tidd and Besant, 2018; Baldwin and Johnson, 1995) form the basis of innovative firms' operations. Considering these expenses, if CEOs, who play a critical role in the scanning, adapting and implementing innovative needs in a firm, are not protected and compensated for making risky choices, the entire investment itself will be threatened. Hence, the findings reiterate and support earlier findings that speak to the importance of compensating CEOs to make high-risk investments that will lead to long-term economic and financial gains for the firm when the innovative behaviors result in competitive market shares and profits.Originality/valueThe original work is related to the investigation of pay–performance sensitivity in the presence of innovation, which has not been fully investigated in prior literature.

ALCOHOL USE, ETHNICITY, AND DISABILITY: A COMPARISON OF AFRICAN-AMERICAN AND CAUCASIAN GROUPS

1997 ◽  
Vol 25 (3) ◽  
pp. 265-276 ◽  
Author(s):  
Eddie B. Sample ◽  
Li Li ◽  
Dennis Moore
Keyword(s):  
African Americans ◽  
Alcohol Use ◽  
Multivariate Data Analysis ◽  
Regression Models ◽  
Rehabilitation Services ◽  
Drinking Patterns ◽  
Cultural Issues ◽  
Cultural Groups ◽  
Multiple Regression Models ◽  
The Usa

Previous research has consistently reported that alcohol consumption among the general population varies across cultural groups. However, studies investigating risk factors and drinking patterns of African-Americans and Caucasians with disabilities have been limited. The current study explored the factors of alcohol use among African-Americans and Caucasians with disabilities who were seeking rehabilitation services in three mid-western states of the USA. Multivariate data analysis revealed that African-Americans were more likely to use alcohol than their Caucasian counterparts when other demographic and disability variables were controlled. Additionally, separate multiple-regression models differentiated patterns between African-Americans and Caucasians in selected variables on alcohol use. Cultural issues and implications for rehabilitation services are discussed.

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