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Full-Text Articles in Finance and Financial Management
The Compensation Committee Process, Dana Hermanson, James Tompkins, Rajaram Veliyath, Zhongxia Ye
The Compensation Committee Process, Dana Hermanson, James Tompkins, Rajaram Veliyath, Zhongxia Ye
James Tompkins
The article investigates the process used in executive compensation committees to meet their responsibilities, particularly noting the lack of research into the committee process itself. It discusses committee's areas of responsibility, approaches to meeting their responsibilities, and committee operational issues through the use of interviews with compensation committee members. It addresses themes of the interviews including achieving fair compensation, promoting the legitimacy of the committee's decisions, and monitoring the committee for appropriate behaviors. It comments on the tension between executive committees, shareholders, organizational management, and stakeholders.
Executive Compensation: The Role Of Shari’A Compliance, William Marty Martin, Karen Hunt Ahmed
Executive Compensation: The Role Of Shari’A Compliance, William Marty Martin, Karen Hunt Ahmed
Karen Hunt Ahmed
Abstract Purpose The purpose of this paper is to illuminate issues surrounding executive compensation as it relates to current understandings of Islamic business law. Methodology We review the emerging bodies of literature in the fields of executive compensation and opinions of stock options under Shari’a law. Findings It appears that the trend in offering employee stock options as part of a Shari’a compliant compensation package is acceptable in most cases, yet because of its close association with the more problematic idea of derivative transactions, the company must be vigilant in obtaining the approval from its Shari’a Standards Board before offering …
Executive Compensation: The Role Of Shari’A Compliance, William Marty Martin, Karen Hunt Ahmed
Executive Compensation: The Role Of Shari’A Compliance, William Marty Martin, Karen Hunt Ahmed
William Marty Martin
Abstract Purpose The purpose of this paper is to illuminate issues surrounding executive compensation as it relates to current understandings of Islamic business law. Methodology We review the emerging bodies of literature in the fields of executive compensation and opinions of stock options under Shari’a law. Findings It appears that the trend in offering employee stock options as part of a Shari’a compliant compensation package is acceptable in most cases, yet because of its close association with the more problematic idea of derivative transactions, the company must be vigilant in obtaining the approval from its Shari’a Standards Board before offering …
Dual Agency: Corporate Boards With Reciprocally Interlocking Relationships, Kevin F. Hallock
Dual Agency: Corporate Boards With Reciprocally Interlocking Relationships, Kevin F. Hallock
Kevin F Hallock
[Excerpt] This paper studies reciprocal interlocks of boards of directors of large firms where an employee of firm A sits on firm B's board and at the same time an employee of firm B sits on firm A's board. The study of Boards of Directors by those in economics and finance is not new. In fact, Dooley (1969) writes of interlocking directorates, but his definition is different in that he presents evidence of interlock where "at least one director ... sat on the board of at least one other of the largest companies". Books by Mizruchi (1982) and Pennings (1980) …
The Timeliness Of Performance Information In Determining Executive Compensation, Kevin F. Hallock, Paul Oyer
The Timeliness Of Performance Information In Determining Executive Compensation, Kevin F. Hallock, Paul Oyer
Kevin F Hallock
We study whether boards of directors concentrate on performance near compensation decision times rather than providing consistent incentives for chief executive officers (CEO). throughout the fiscal year. We show empirically that managers can profit by moving sales revenue among fiscal quarters. Though this may suggest that boards use short-term trends when determining rewards, we find evidence consistent with boards tying pay to recent sales growth so as to use the best information about future performance. We also find that the timing of profits throughout the year does not affect CEO pay, which may suggest that smoothing firm income is important …
Termination Risk And Managerial Risk Taking, Atreya Chakraborty, Shahbaz A. Sheikh, Narayanana Subramanian
Termination Risk And Managerial Risk Taking, Atreya Chakraborty, Shahbaz A. Sheikh, Narayanana Subramanian
Atreya Chakraborty
We test the hypothesis that managers who face a high termination risk make less risky investments than the managers who face a low termination risk. A 10% increase in our measure of termination risk is associated with a 5%–23% decline in stock returns volatility for the median firm in our sample. We also find that for CEOs who are more likely to be fired in the event of investment failure, the inhibiting effect of termination risk appears to offset the positive effect of convexity of managerial compensation on managerial risk taking. These results are robust to alternative definitions of forced …