THE FIT BETWEEN CEO COMPENSATION DESIGN AND FIRM RISK.

2002 ◽  
Vol 45 (4) ◽  
pp. 745-756 ◽  
Author(s):  
J. S. Miller ◽  
R. M. Wiseman ◽  
L. R. Gomez-Mejia
Keyword(s):  
Ceo Compensation ◽  
Firm Risk ◽  
Compensation Design

The Fit Between CEO Compensation Design and Firm Risk

2002 ◽  
Vol 45 (4) ◽  
pp. 745-756 ◽  
Author(s):  
Janice S. Miller ◽  
Robert M. Wiseman ◽  
Luis R. Gomez-Mejia
Keyword(s):  
Ceo Compensation ◽  
Firm Risk ◽  
Compensation Design

scholarly journals Hiring the Right CEO: How Does the Type of CEO Industry Experience Affect Firm Performance, Firm Risk-Taking Behavior, and CEO Compensation?

2021 ◽  
Vol 22 (2) ◽  
pp. 828-845
Author(s):  
Candra Chahyadi ◽  
Trang Doan ◽  
Junnatun Naym
Keyword(s):  
Firm Performance ◽  
Risk Taking ◽  
Ceo Compensation ◽  
High Growth ◽  
Firm Risk ◽  
Business Application ◽  
Risk Taking Behavior ◽  
Lead Firm ◽  
The Impact ◽  
Industry Experience

This paper examines how the type of CEOs’ industry experience (whether a CEO has cross-industry or specific-industry experience) on firm performance, firm risk-taking behavior, and their own compensation. We find that CEOs with cross-industry experience tend to relatively lower the firm performance as well as invest less on R&D. On the other hand, CEOs with specific-industry experience lead firm to higher performance and invest more on R&D expenditures until it reaches a certain threshold, especially among high-growth firms. Total compensation paid to the CEO does not seem to be affected by the type of CEO industry experience. This paper contributes to the literature that examines the impact of CEO characteristics on firm outcomes and CEO compensation. One important business application of our paper is that to optimize firm performance, firms should hire CEOs with the length of specific-industry experience not beyond the threshold levels.

The effect of analyst coverage on CEO compensation structure: evidence from the S & P 1500

2016 ◽  
Vol 42 (3) ◽  
pp. 191-211 ◽  
Author(s):  
Shin-Rong Shiah-Hou
Keyword(s):  
Ceo Compensation ◽  
Pay For Performance ◽  
Firm Risk ◽  
Publicly Traded ◽  
Internal Governance ◽  
Analyst Coverage ◽  
Content Type ◽  
Compensation Structure ◽  
Institutional Holdings

Purpose – What is the role of analysts in reducing agency problems and information asymmetry between stockholders and managers? The purpose of this paper is to confirm the analyst’s role by examining his or her influence on CEO compensation structure. Design/methodology/approach – The major population for this study consists of publicly traded corporations of the S & P 1500 for which data on CEO compensation is available from Standard & Poor’s Execucomp database, along with the proxy statements of these firms. Regression analysis is used to test hypotheses about the effect of analyst coverage on CEO compensation. Findings – The evidence shows that CEOs of firms with greater analyst coverage or higher analyst coverage quality (analyst coverage index) have higher pay-for-performance (Delta), more compensation incentives to increase firm risk (Vega), more total compensation, and more excess compensation. Even after controlling for the effect of other types of corporate governance, including internal governance and institutional holdings, analysts’ activities still have an incremental effect on CEO compensation structure. Practical implications – The authors findings may be useful to investors who use analyst coverage to evaluate the firm’s CEO compensation, as it suggests that investors may reference the information about analyst coverage of firms to craft appropriate CEO compensation structures. Originality/value – The authors results contribute by showing that the extra effect of analyst activities on CEO compensation structure exists, even after controlling for other types of governance mechanisms, such as internal governance and institutional investors’ holdings.

Benchmark on themselves: CEO-directors’ influence on the CEO compensation

2019 ◽  
Vol 45 (7) ◽  
pp. 810-826
Author(s):  
Bill Francis ◽  
Iftekhar Hasan ◽  
Yun Zhu
Keyword(s):  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Design Procedure ◽  
Chief Executive ◽  
Data Availability ◽  
Outside Directors ◽  
Content Type ◽  
Public Firms ◽  
Executive Officers ◽  
Compensation Design

Purpose The purpose of this paper is to examine whether or not the chief executive officers’ (CEO) compensation is affected by the compensation of the outside directors sitting on their board, who are also CEOs of other firms. Design/methodology/approach The authors collect CEOs’ and CEO-directors’ compensation data from Execucomp. The authors then match the CEO-directors’ compensation with appointing firms’ CEO compensation and financial statements, from Execucomp and Compustat, respectively. The sample contains 7,561 firm-year observations from 1996 to 2010, with 1,213 distinct S&P 1500 firms and 1,563 distinct CEO-directors. The authors use ordinary least squared method with firm and year fixed effect in most of the analysis. Findings With both annual and excess compensation, the authors find strong evidence that CEO-directors’ compensation is related to the compensation of the CEO. Causally, when CEO-director overturns his/her excess compensation from negative to positive, the CEO is more likely to have similar upward change in the following year, while more interestingly, the opposite does not hold. These findings are persistent over time and remain robust to various additional tests. Research limitations/implications Due to the data availability, this paper investigates the S&P 1500 public firms. Originality/value It is the first work that investigates the link between board members’ external compensation and the CEO’s compensation. This sheds new light on the process of the CEO’s compensation design, in regard to both the information being utilized in the design procedure and the CEO’s influence on his/her own compensation. Second, this paper adds additional evidence to the choice of peer groups in compensation construction. Third, the authors enhance the understanding of the role of CEO-directors. The authors show that CEO-directors may be the ally of CEO, and help in justifying CEO’s compensation, especially when underpaid.

scholarly journals The Role of Accounting in the Design of CEO Equity Compensation

2007 ◽  
Vol 82 (2) ◽  
pp. 327-357 ◽  
Author(s):  
Mary Ellen Carter ◽  
Luann J. Lynch ◽  
I˙rem Tuna
Keyword(s):  
Financial Reporting ◽  
Ceo Compensation ◽  
Stock Option ◽  
Total Compensation ◽  
Equity Compensation ◽  
Restricted Stock ◽  
Compensation Design

We examine the role of accounting in CEO equity compensation design. For a sample of ExecuComp firms in 1995–2001, we find that financial reporting concerns are positively related to stock option use and total compensation, and negatively related to the use of restricted stock. We confirm our findings by examining changes in CEO compensation in firms that begin expensing options in 2002 or 2003. We find that these firms reduce their option use and increase their restricted stock use after starting to expense options but exhibit no decrease in total compensation. Taken together, our analyses suggest that favorable accounting treatment for options led to a higher use of options and lower use of restricted stock than would have been the case absent accounting considerations.

One Size Doesn't Fit All: Gender Differences in the CEO Compensation-Firm Risk-Taking Relationship

2018 ◽  
Vol 2018 (1) ◽  
pp. 13281
Author(s):  
Felice Klein ◽  
Aaron Hill ◽  
Cynthia E. Devers ◽  
Matt Hinkel
Keyword(s):  
Gender Differences ◽  
Risk Taking ◽  
Ceo Compensation ◽  
Firm Risk

Moving Closer to the Action: Examining Compensation Design Effects on Firm Risk

2008 ◽  
Vol 19 (4) ◽  
pp. 548-566 ◽  
Author(s):  
Cynthia E. Devers ◽  
Gerry McNamara ◽  
Robert M. Wiseman ◽  
Mathias Arrfelt
Keyword(s):  
Firm Risk ◽  
Design Effects ◽  
Compensation Design

Benchmarking of Pay Components in CEO Compensation Design

2021 ◽  
Author(s):  
Yaniv Grinstein ◽  
Beni Lauterbach ◽  
Revital Yosef
Keyword(s):  
Ceo Compensation ◽  
Compensation Design
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