CEO Deal-Making Activity, CEO Compensation and Firm Value

2010 ◽  
Author(s):  
Eliezer M. Fich ◽  
Laura T. Starks ◽  
Adam S. Yore
Keyword(s):  
Firm Value ◽  
Ceo Compensation ◽  
Deal Making

Family CEOs vs. Nonfamily CEOs in the Family-Controlled Firm: An Examination of the Level and Sensitivity of Pay to Performance

2000 ◽  
Vol 13 (2) ◽  
pp. 121-131 ◽  
Author(s):  
Daniel L. McConaughy
Keyword(s):  
Firm Value ◽  
Ceo Compensation ◽  
Family Firms ◽  
Multivariate Analyses ◽  
Incentive Alignment ◽  
Founding Family ◽  
The Family

This study examines CEO compensation in 82 founding-family-controlled firms; 47 CEOs are members of the founding family and 35 are not. It tests the family incentive alignment hypothesis, which predicts that family CEOs have superior incentives for maximizing firm value and, therefore, need fewer compensation-based incentives. Univariate and multivariate analyses show that family CEOs' compensation levels are lower and that they receive less incentive-based pay—confirming the family incentive alignment hypothesis and suggesting the possible need for family firms to increase CEO compensation when they replace a founding family CEO with a nonfamily-member CEO.

CDS, CEO Compensation, and Firm Value

2021 ◽  
pp. 102445
Author(s):  
Abu Amin ◽  
Pawan Jain ◽  
Arun Upadhyay
Keyword(s):  
Firm Value ◽  
Ceo Compensation

The Effect of Monitoring on CEO Compensation in a Matching Equilibrium

2018 ◽  
Vol 53 (3) ◽  
pp. 1297-1339 ◽  
Author(s):  
Pierre Chaigneau ◽  
Nicolas Sahuguet
Keyword(s):  
Chief Executive Officer ◽  
Firm Value ◽  
Ceo Compensation ◽  
Chief Executive ◽  
Ceo Pay ◽  
Business Conditions ◽  
Ceo Selection ◽  
Low Ability

We consider a model of chief executive officer (CEO) selection, dismissal, and retention. Firms with larger blockholder ownership monitor more; they get more information about CEO ability, which facilitates the dismissal of low-ability CEOs. These firms are matched with CEOs whose ability is more uncertain. For retention purposes, the compensation of these CEOs is more sensitive to firm value and relatively less sensitive to business conditions. Moreover, these CEOs receive lower salaries when CEO skills are sufficiently transferable. A diffusion of best monitoring practices increases competition for CEOs and raises CEO pay in all firms, including those with unchanged monitoring ability.

Excessive managerial entrenchment, corporate governance, and firm performance

2019 ◽  
Author(s):  
◽  
Christelle Antounian
Keyword(s):  
Firm Performance ◽  
Firm Value ◽  
Ceo Compensation ◽  
Inverse Correlation ◽  
Poor Performance ◽  
Ceo Turnover ◽  
Managerial Entrenchment ◽  
Board Monitoring ◽  
The Difference ◽  
The Impact

This paper investigates the impact of excessive managerial entrenchment on the CEO turnover-performance sensitivity, CEO compensation, and firm value. We measure the degree of managerial entrenchment based on the E-index presented by Bebchuck et al. (2006). Our main focus is on firms’ excess managerial entrenchment, which is calculated by finding the difference between firm’s E-index and its industry median in a given year. Our findings suggest that an increase in excess CEO entrenchment reduces the likelihood of CEO turnover due to poor performance. We also show a positive correlation between excessive entrenchment and CEO compensation as managers gain more power and authority when they are entrenched. On the other hand, excess CEO entrenchment has an inverse correlation with firm value. We propose that excessive managerial entrenchment has a converse impact on board monitoring and firm performance. Also, we suggest that a sound corporate protects the shareholders’ interests as it prevents CEOs from over entrenchment.

The Interrelationships Between Information Technology Spending, CEO Equity Incentives, and Firm Value

2014 ◽  
Vol 28 (2) ◽  
pp. 41-65 ◽  
Author(s):  
Adi Masli ◽  
Vernon J. Richardson ◽  
Juan Manuel Sanchez ◽  
Rodney E. Smith
Keyword(s):  
Information Technology ◽  
Firm Value ◽  
Ceo Compensation ◽  
It Governance ◽  
Business Value ◽  
Risky Asset ◽  
Equity Compensation ◽  
Equity Incentives ◽  
Compensation Incentives

ABSTRACT We examine the interrelationships between information technology spending, CEO equity compensation incentives, and firm value. We present two related pieces of evidence. First, we find that CEO equity incentives are associated with IT spending, suggesting that CEOs with higher incentives are more likely to invest in a risky asset such as IT. Second, we find that the association between IT spending and business value is stronger for firms that grant CEOs higher equity incentives. Our study contributes to the CEO compensation and IT governance literatures.

scholarly journals Corporate governance and firm value: Evidence from Canadian capital markets

2009 ◽  
Vol 6 (3) ◽  
pp. 293-307 ◽  
Author(s):  
Parveen Gupta ◽  
Duane Kennedy ◽  
Samuel Weaver
Keyword(s):  
Corporate Governance ◽  
Capital Markets ◽  
Firm Value ◽  
Ceo Compensation ◽  
Board Composition ◽  
Shareholder Rights ◽  
Board Governance ◽  
Using Data ◽  
Composite Scores ◽  
Governance Disclosure

The Globe and Mail’s Report on Business annually publishes governance rankings for more than 200 companies represented in the TSX/S&P index. There are four sub-categories that comprise the composite scores: board composition; board and CEO compensation; shareholder rights; and board governance disclosure. The purpose of this paper is to examine the association between the composite or sub-category corporate governance scores and various measures of firm value. We test for this association using data for 2002 through 2005 on the Report on Business rankings and various financial and market measures. Overall, our study does not find an association between the composite or subcategory corporate governance scores and the various measures of firm value.

Firm Performance in the Hospitality Industry: Do CEO Attributes and Compensation Matter?

2018 ◽  
Vol 43 (2) ◽  
pp. 272-282 ◽  
Author(s):  
Yuan Li ◽  
Manisha Singal
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Firm Value ◽  
Hospitality Industry ◽  
Ceo Compensation ◽  
Past Research ◽  
Firm Financial Performance ◽  
Equity Compensation ◽  
And Gender ◽  
Ceo Attributes

Past research has shown mixed results regarding the role CEO compensation plays in influencing firm financial performance in the hospitality industry. To explore this relationship further, we concomitantly examine the role of compensation and CEO attributes like education, age, tenure, functional background, and gender on firm financial performance. Our analyses are based on secondary and hand-collected data from a large and comprehensive sample of U.S. publicly traded hospitality firms. The results from panel data analyses show that CEO cash compensation is positively related to return on assets, while equity compensation is unrelated to firm performance. We further find that when CEO compensation and attributes are jointly examined, CEO compensation has a relatively lower impact on firm performance than CEO attributes do. The results imply that the hospitality industry may want to reconsider its compensation practices in order to better align the interests of managers and shareholders and motivate managers to maximize firm value.

scholarly journals Corporate governance, analyst following and firm value

2014 ◽  
Vol 14 (4) ◽  
pp. 453-466 ◽  
Author(s):  
Sulaiman Mouselli ◽  
Khaled Hussainey
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Ceo Compensation ◽  
Stock Exchange ◽  
Financial Analysts ◽  
Chief Executive ◽  
Analyst Following ◽  
Content Type ◽  
Large Sample ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of a firm’s corporate governance (CG) mechanisms on the number of financial analysts following UK firms. The potential effect of the number of analysts following firms in the UK on the association between CG mechanisms and firm value was also examined. Design/methodology/approach – Multiple regression models were used to examine the association between CG, analyst coverage and firm value for a large sample of UK firms listed in London Stock Exchange with financial year ends between January 2003 and December 2008. Findings – It was found that the aggregate level of CG quality is positively associated with the number of analysts following UK firms. In addition, the compensation score is the main component that affects the number of analysts following UK firms. The results suggest that financial analysts are particularly concerned with how much compensation executives and directors receive. This is consistent with Jensen and Meckling (1976) who argue that chief executive officer (CEO) compensation can be used as effective mechanisms for mitigating agency costs. Hence, higher levels of CEO compensation attract more financial analysts to follow the firm. Surprisingly, when the joint effect of both CG quality and the number of analysts following on firm value was examined, no significant effect was found for both variables on firm value. Originality/value – This paper contributes to prior research by providing the first empirical evidence on the impact of disaggregated levels of CG on analyst following and firm value for a large sample of UK firms.

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