scholarly journals Unpacking the dynamics of a contested practice: the case of executive compensation and the shareholder value orientation in the USA

2020 ◽  
Author(s):  
Edward J Carberry ◽  
Edward J Zajac
Keyword(s):  
Executive Compensation ◽  
Media Coverage ◽  
Stock Options ◽  
Shareholder Value ◽  
Value Orientation ◽  
Power Relationships ◽  
Media Criticism ◽  
Corporate Scandals ◽  
The Usa ◽  
Restricted Stock

Abstract The corporate scandals and market crashes of the 2000s generated significant criticism of the shareholder value orientation (SVO) in the USA. We offer a sociopolitical analysis of how this criticism triggered changes in stock-based executive compensation, a central practice associated with the SVO. We first analyze how corporate stakeholders redefined different forms of stock-based compensation, motivated new regulations and wielded direct challenges to specific firms. We then predict how firm-specific differences in external challenges and intra-firm power relationships were related to changes in the use of stock options and restricted stock grants (RSGs), testing our predictions using a longitudinal dataset of S&P 500 executives between 2002 and 2012. We find that firms facing negative media coverage of their executive compensation practices made less use of both forms of stock-based compensation, while firms facing shareholder activism only made less use of stock options, the form that was more heavily criticized. In addition, firms with more powerful CEOs utilized RSGs more heavily and did so even when facing media criticism. Our findings demonstrate that while stock options were vulnerable to change, stock-based compensation remained resilient because the structural power of CEOs, a core corporate governance feature of the SVO, also remained resilient.

Restricted Stock versus Stock Options: The Case of Jones Apparel Group, Inc.

2006 ◽  
Vol 21 (4) ◽  
pp. 449-459 ◽  
Author(s):  
R. Loring Carlson ◽  
Thomas J. Vogel
Keyword(s):  
Stock Options ◽  
Chief Executive ◽  
Fair Value ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Executive Pay ◽  
Corporate Scandals ◽  
Compensation Package ◽  
Restricted Stock ◽  
Compare And Contrast

In recent years, the structure of executive/employee compensation packages has focused less on stock options and more on restricted stock. The Financial Accounting Standards Board (FASB) characterizes both of these alternatives as stockbased compensation. The reasons for the shift are numerous and include increased scrutiny of executive pay after recent corporate scandals and a renewed emphasis on the expensing of stock options using the fair value method. In this case, we focus on the issues that led Jones Apparel Group, Inc. to change its focus from stock options to restricted stock in the compensation package of its Chief Executive Officer. Jones was not subject to any scandal or corporate malfeasance, but the case demonstrates how recent events have impacted companies that use stock-based compensation. The case allows students to compare and contrast the corporate governance and accounting impacts of stock options and restricted stock.

scholarly journals News insights on executive compensation

2010 ◽  
Vol 7 (3) ◽  
pp. 8-24
Author(s):  
João Paulo Vieito
Keyword(s):  
Executive Compensation ◽  
Stock Options ◽  
New Economy ◽  
Compensation Structure ◽  
Top Executives ◽  
The Past ◽  
The Usa ◽  
Old Economy ◽  
Changes Over Time ◽  
Industry Sectors

This paper aims to examine executive compensation structure and determinants on a panel of the socalled “new economy” and “old economy” firms in the USA over the period 1992-2004. The results reveal that executive compensation structure in new versus old economy firms is different and more importantly, it changes over time. Additionally, our results document that the factors explaining executive compensation of new and old economy are different, and also that stock options, despite the problems that have been related with these compensation components in the past, are still the most important ones, both in new and old economy firms. Our results imply that different reward structures exist for different industry sectors at different stages in their development and companies must readjust compensation structures frequently to provide incentive for their top executives.

Multi-stakeholder initiatives and the divergent construction and implementation of sustainable agriculture in the USA

2017 ◽  
Vol 34 (04) ◽  
pp. 293-303 ◽  
Author(s):  
Jason Konefal ◽  
Maki Hatanaka ◽  
Douglas H. Constance
Keyword(s):  
Sustainable Agriculture ◽  
Ecological Systems ◽  
Agricultural Sustainability ◽  
Power Relationships ◽  
Specialty Crops ◽  
Institutional Approach ◽  
Governance Practices ◽  
The Usa ◽  
Using Data ◽  
Multi Stakeholder

AbstractMulti-stakeholder initiatives (MSIs) have emerged as a leading institutional approach for advancing sustainability globally. This paper examines three prominent MSIs that have developed sustainability metrics and a standard for US agriculture: Field to Market, the Stewardship Index for Specialty Crops and the National Sustainable Agricultural Standard Initiative. Using data from interviews and content analysis of initiative reports, two sets of analyses are presented. First, building on Paul Thompson's tri-partite theorization of sustainability, how each initiative is conceptualizing agricultural sustainability is analyzed. We find that two contrasting visions of sustainable agriculture for the USA have emerged from the three MSIs. One vision is a resource sufficiency approach focused on eco-efficiencies and the other vision is a functional integrity approach that emphasizes the maintenance of resilient agricultural and ecological systems. Second, we examine the governance practices of the MSIs to explain why such divergent conceptualizations of sustainability have been mapped out. We find that far from being a neutral forum, the internal dynamics of MSIs often reflect and reproduce existing power relationships among stakeholders. In concluding, we suggest that incremental improvements in sustainability can be achieved using MSIs, but more transformative changes may require other forms of governance.

U.K. Executive Compensation Practices: New Economy versus Old Economy

2004 ◽  
Vol 16 (1) ◽  
pp. 57-92 ◽  
Author(s):  
Konstantinos Stathopoulos ◽  
Susanne Espenlaub ◽  
Martin Walker
Keyword(s):  
Executive Compensation ◽  
Stock Options ◽  
New Economy ◽  
Financial Policy ◽  
Executive Stock Options ◽  
Compensation Package ◽  
Size Growth ◽  
Old Economy ◽  
Almost All

This paper examines the executive compensation practices of listed U.K. retailing companies. We compare “New Economy” retailers (e-commerce/dot-coms) to more traditional retailers operating in the “Old Economy.” We also discriminate between recently floated retailers and their more seasoned counterparts. Using a sample of remuneration contracts for 549 directors in 72 listed U.K. companies in the New and Old Economies, we investigate the structure and level of executive (and nonexecutive) compensation defined as the sum of salary, annual bonus, and the values of executive stock options and long-term incentive plans (LTIPs). We investigate the extent to which the contract features are determined by firm characteristics, economic sector, and governance/ownership factors. In contrast to the U.S., where almost all executive stock options are issued at the money, there is a greater variety of practice in the U.K. with some options being granted substantially in the money. We therefore pay special attention to this U.K. institutional feature by producing a model designed to explain the crosssectional variation in the moneyness of stock options at the date of issue. We also examine the determinants of a number of other contract features. These are: the time to maturity of the executive stock options, the leverage of the compensation package, the ratio of long-term pay relative to short-term pay, and pay performance sensitivity. We find that differences in compensation arrangements can be explained to a significant extent by differences in firm size, growth/growth opportunities, firm financial policy, ownership characteristics, and governance arrangements. We also find some systematic differences between the compensation arrangements of CEOs and other executives.

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