Human Resources Management Commons^™

Paying Our Presidents: What Do Trustees Value?, Ronald G. Ehrenberg, John J. Cheslock, Julia Epifantseva

Ronald G. Ehrenberg

Our study makes use of data from a panel of over 400 private colleges and universities on their presidents’ salaries and benefits. These data, reported annually to the Internal Revenue Service on Form 990, have been collected by and reported in the Chronicle of Higher Education for academic years 1992–1993 through 1997–1998. We merge these data with those from other sources including the American Association of University Professors, the American Council on Education, Who’s Who in America, the National Association of College and University Business Officers, the Council on Aid to Education, and the National Science Foundation’s CASPAR system. This …

The Power Of One: Effects Of Ceo Duality On Compensation Committee Quality And Ceo Compensation, Cindy K. Harris, Carol C. Cirka, Eric Farris

Business and Economics Faculty Publications

This paper contributes to the corporate governance literature by focusing on how Chief Executive Officer (“CEO”) duality and compensation committee quality are related to CEO compensation in the period since passage of the Sarbanes Oxley Act (“SOX”). Unlike research prior to SOX that focused chiefly on committee members’ independence, we measure compensation committee quality in two ways. We consider the average number of board directorships held by compensation committee members as well as the proportion of committee members with prior or current CEO duality experience. We introduce the latter variable as a new measure of quality as it has not …

Estimating Wage-Fringe Trade-Offs: Some Data Problems, Robert Smith, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] This paper represents an inquiry into some of the data related difficulties inherent in estimating wage-fringe trade-offs, and it explores the usefulness of a particular source of data in meeting these difficulties.

The Costs Of Defined Benefit Pension Plans And Firm Adjustments, Burt S. Barnow, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] While it is obvious that the costs of term life insurance vary directly with age, it is less obvious how employers' contributions to pension funds, which comprise a major share of nonwage compensation, vary. As such, we focus in this paper on the most common variant of pension plans and demonstrate how an employer's cost of fully funding a plan varies with the age and service characteristics of his work force. This cost, as a percent of annual salary, is seen to increase with employees' ages and, in some cases, years of service. This variation has important implications for …

Do Economics Departments With Lower Tenure Probabilities Pay Higher Faculty Salaries?, Ronald Ehrenberg, Paul Pieper, Rachel Willis

Ronald G. Ehrenberg

The simplest competitive labor market model asserts that if tenure is a desirable job characteristic for professors, they should be willing to pay for it by accepting lower salaries. Conversely, if an institution unilaterally reduces the probability that its assistant professors receive tenure, it will have to pay higher salaries to attract new faculty. Our paper tests this theory using data on salary offers accepted by new assistant professors at economics departments in the United States during the 1974-75 to 1980-81 period, along with data on the proportion of new Ph.D.s hired by each department between 1970 and 1980 that …

Executive Compensation In Municipalities, Gerald S. Goldstein, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] In this paper we are concerned with the salaries of three important municipal officials; city-managers, police chiefs, and fire chiefs. We present a model that relates the salaries of these officials to a set of explanatory variables, the most important being measures associated with job performance. Two of these measures of performance are developed in the study. Further, the influence of the city-manager form of government on the incentive structure facing police chiefs and fire chiefs, and the interdependence betwen the salaries of police chiefs and fire chiefs is investigated. The model is tested using cross-section data for 1967.

Comparable Worth In The Public Sector, Ronald G. Ehrenberg, Robert Smith

Ronald G. Ehrenberg

[Excerpt] At the theoretical level, we conclude that the case for comparable worth rests on the argument that the current distribution of female employees is based on discriminatory barriers which existing legislation have not broken down. If this argument is valid, the desirability of comparable worth depends upon one's perceptions of how the benefits it provides contrasts with the efficiency losses it induces. Given the trade-offs involved, ultimately one's position on comparable worth must depend on value judgments.

Comparable-Worth Wage Adjustments And Female Employment In The State And Local Sector, Ronald G. Ehrenberg, Robert S. Smith

Ronald G. Ehrenberg

Our paper simulates the likely effects of a comparable-worth wage-adjustment policy in the state and local sector on female employment in the sector. The simulation is based on estimates of within-occupation male/female substitution and across-occupation occupational employment substitution that we obtain using data from the 1980 Census of Population.

Vacation As Compensation, Kevin F. Hallock

Economics Faculty Publications

There is enormous variation in vacation time. Just as there are differences in what pay mix and workplace pract ices are normal, so are there differences in vacation time — across countries, occupations, companies and time.

Officer Performance And Compensation In Local Building Trades Unions, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] This paper presents estimates of the relationship between the performance and compensation of local building trades union leaders. A growing literature has revived the common-sense notion that organizations should structure the compensation of both their employees and their executives so as to encourage them to take actions consistent with the goals of the organizations. One way to minimize the probability that executives will take actions contrary to the organization's goals is to tie their compensation to measures of their organization's performance.

Introduction: Do Compensation Policies Matter?, Ronald Ehrenberg

Ronald G. Ehrenberg

[Excerpt] The papers in this volume should give the reader a sense of the exciting empirical research that has recently taken place on compensation-related issues. As a set, these papers considerably expand our empirical evidence on the effects of compensation policies. Several papers show that executive compensation is structured in a way that at least implicitly ties executive compensation changes to measures of corporate performance, and —crucially—that doing so leads to improved corporate performance (Leonard, Murphy/Gibbons, Abowd). Others show that compensation systems that pay workers for performance, in the sense of providing explicit or implicit incentives for high levels of …

Determinants Of The Compensation And Mobility Of School Superintendents, Ronald G. Ehrenberg, Richard P. Chaykowski, Randy Ehrenberg

Ronald G. Ehrenberg

Analyzing 197-83 panel data from more than 700 New York State school districts, the authors find evidence that school superintendents were rewarded, both by higher salary increases and by enhanced opportunities to move to belter-paying jobs, for having low school tax rates and high educational achievement within their districts, relative to the values of those variables in comparable school districts in the state. The rewards were, however, quite small. The analysis also suggests that the superintendents themselves did not significantly influence either school tax rates or educational test scores in their districts.

The Problem Of Action And Interest Alignment: Beyond Job Requirements And Incentive Compensation, Alexander Colvin, Wendy R. Boswell

Alexander Colvin

We introduce two concepts, action alignment and interest alignment, that we propose to help explain the linkages between employee behaviors and organizational strategy. We first examine the problem of action alignment, developing employee ability to identify and engage in behaviors that most effectively lead to the realization of the goals of organizational strategy. In particular, our discussion of action alignment focuses on the issues of employee line of sight to organizational strategy and the development of shared mindsets within the organization. We argue that aligned actions involving employee behaviors that are discretionary and difficult to specify in advance are especially …

The Look Of The Line: An Empirical Investigation Of The Impacts Of Facial Symmetry On Salary Levels Of Offensive Linemen In The Nfl, Kristen Wampole

Business and Economics Honors Papers

Evaluation of a professional athlete's performance for the purposes of compensation determination is difficult, especially when decision making may not follow the expected "instrumental rationality." This paper will look to examine the factors, both productive and non-productive, impacting an Offensive Lineman's salary in the NFL. The purpose of this study is to determine whether an offensive lineman's salary is based on productive characteristics adhering to instrumental rationality, or whether the influence of non-productive characteristics influence salary as ultimately determined by team management. Results indicate that players within the tackle position with earning salaries in the seventy-fifth percentile gain additional benefits …

Does Race Influence Executive Compensation In Chinese Firms?, Elizabeth Mahoney

Business and Economics Honors Papers

In this study, we considered the effects of Chinese cultural and political influences on executive compensation in Chinese firms. The chief focus of this study is on whether the race of executives or the racial composition of the compensation committee affects the average compensation of executives, though other factors such as sales, industry, and compensation committee size were also included in the model. Data was collected from Chinese firms listed on the New York Stock Exchange, with data for the companies gathered for the year 2009 and executive salaries collected for the year 2010.

What Effect Do Corporate Governance Characteristics Have On Ceo Compensation In A Small Cap Firm?, Kiley Stauffer

Business and Economics Honors Papers

Extensive research has been conducted to examine the effect that corporate governance structure has on CEO compensation. Past studies have focused primarily on larger corporations and have neglected smaller public firms. By shifting focus to small cap firms, this study hopes to find patterns between CEO compensation and specific corporate governance components. These include CEO duality, the presence of a dual founder CEO, and the level of equity ownership held by the CEO. Empirical evidence has suggested that CEO duality and increased ownership equity of a dual founder CEO may significantly impact CEO compensation.

Research Brief: "The Effect Of Veterans Benefits On Education And Earnings", Institute For Veterans And Military Families At Syracuse University

Institute for Veterans and Military Families

This study found that veterans’ benefits which subsidize education make up the largest federal program for student aid, and that veterans’ benefits are estimated to increase future schooling by 1.4 years, meaning annual earnings for these veterans will be 6% higher than they would have been otherwise. In practice, that implies annual earnings approximately 6% higher than would have been expected in the absence of the benefits. In policy, policymakers should note that this study found smaller effects on earnings and education than previous studies have found. Suggestions for future study include comparing the annual earnings premium for veterans’ benefit …

What Determines Public Pension Investment Risk-Taking Policy, Nancy Mohan, Ting Zhang

Economics and Finance Faculty Publications

State public pension plans, mostly defined benefit plans, cover pension benefits for 12.8 million active public employees and 5.9 million retirees and other annuitants. However, by the end of 2009, public pension plans had accumulated a total funding deficit of $697 billion (measured by the difference between actuarial pension assets and liabilities). On average, public pension funds cover 75 percent of their liabilities, but individual state results vary greatly.

The 2008 stock market crash strongly affected pension asset value in that equity allocation on average accounted for 56 percent of invested assets. The average 2009 pension asset beta of 0.63 …

Upjohn Institute Policy Paper: Public Pension Crisis And Investment Risk Taking: Underfunding, Fiscal Constraints, Public Accounting, And Policy Implications, Nancy Mohan, Ting Zhang

Economics and Finance Faculty Publications

Public pension funds that cover retirement benefits for almost 20 million active or retired employees have been significantly underfunded. An important, though largely overlooked, issue related to pension underfunding is the excessive investment risk levels assumed by public plans. Our analysis suggests government accounting standards strongly affect public fund investment risk, as higher return assumptions (used to discount pension liabilities) are associated with higher investment risk.

Public funds undertake more risk if they are underfunded and have lower investment returns in previous years, consistent with the risk transfer hypothesis. Furthermore, pension funds in states facing fiscal constraints allocate more assets …

Nothing Lasts Forever: A Different Way To Structure Severance, Kevin F. Hallock

Economics Faculty Publications

When a CEO receives a massive payout in the face of job cuts and a precipitous drop in stock price, should we really be surprised to see shareholders (and the public) get upset?

Cultural Context And Its Affect On Management Practices In Organizations - A Special Focus Of Compensation Practices, Shandana Shuaib

Business Review

Management practices are carried out in organizations which operate in some sort of environment. The environment is basically divided into two types: internal environment and external environment. In both these environments culture constitutes the main part. Thus, in order to fully comprehend the management practices in organizations it is utmost necessary to understand the cultural context of that society in which it operates. Many management practices if enforced without taking into consideration its cultural context may not yield the expected results. Similarly a management practice which might be very effective in one culture may not be so in another cultural …