Business Commons^™

Top Athlete Pay, Kevin F. Hallock

Economics Faculty Publications

The US has a history of discussing the pay of the relatively well-paid. This is partly because pay levels of some are revealed publicly (e.g., CEOs of publicly traded companies). Americans are also characterized as being celebrity-obsessed. So discussing the pay of superstars seems inevitable. However, they do not have quality data on the compensation of the relatively highly paid in many organizations and professions. When the author speaks about compensation in front of large groups, someone (and in many cases, many people) gets incensed over what they term "outrageous" or "egregious" levels of executive compensation. Athletes are rarely mentioned. …

Amazon.Com: Offering Everything From A To Z, Stephanie Lang, Logan Tinder, Jarett Zimmerman, Jeffrey S. Harrison

Robins Case Network

Amazon’s focus on customer service has led to an impressive record of growth and profitability. However, late in 2012, the company posted a quarterly loss. This asks whether the company may be sacrificing profits in the interest of growing rapidly. It also explores the incredibly competitive environment Amazon faces.

Economic Effects Of The Minimum Wage, Kevin F. Hallock

Economics Faculty Publications

The US minimum wage, at almost 75 years old, remains the topic of many academic studies and much policy debate despite the fact that only about 5% of hourly employees are currently paid at or below the federal minimum. There are many possible and interesting economic effects of the minimum wage. The issue that has received by far the most attention is whether increasing the minimum wage has a negative effect on employment, and if so, for whom and by how much. Economists first approach this question through the basic theory of a perfectly competitive labor market where all workers …

Ceos Off The Clock, Kevin F. Hallock

Economics Faculty Publications

There is new and interesting academic work on how executives spend their time and the personal choices they make to maximize utility. From a compensation point of view, one issue that has been at the forefront with respect to executives is perks. One CEO compensation perk that has also received increased scrutiny but is surviving better than club memberships is the use of private aircraft. In a related April 2012 paper, "Executives' 'Off-The-Job' Behavior, Corporate Culture and Financial Reporting Risk" (National Bureau of Economic Research working paper), Robert Davidson, Abbie Smith and Aiyesha Dey consider other off-the-clock behaviors of CEOs …

Paying Professors, Kevin F. Hallock

Economics Faculty Publications

One of the most interesting quirks of academia is professional tenure. Many argue that tenure is necessary so that faculty can be protected by "academic freedom" to study the issues they find important without outside interference or pressures to conform. It is also, obviously, a nonmonetary reward and this security for life could offset higher salaries. Few accounts of the tenure system, however, recognize that while tenure essentially grants a job for life, it does not come with guaranteed lifetime raises. Some academic organizations, however, give roughly across the board annual raises. They don't seriously reward performance until a faculty …

Does Graduating In A Bad Economy Penalize Your Pay Tor Life?, Kevin F. Hallock

Economics Faculty Publications

Rigorous research has shown that the state of the economy when one graduates from college does matter. And, unfortunately, given the current slow-growth labor market, it matters not just for earning in the first job after college but also for compensation years in the future. Recessions are bad on graduates' pocketbooks, at graduation and in years to come. If that's not enough, it looks like recessions could be bad for these graduates' current and future health too. J. Catherine Maclean studies the effects of graduating from college during a bad economy on physical functioning, mental functioning and depressive symptoms on …

General Motors Company: Restructured To Rediscover American Innovation, Jeffrey S. Harrison, Stefan Michalski, Joel Winbigler, Trevor Wind

Robins Case Network

Many analysts predicted that General Motors was not salvageable. However, after a government-backed restructuring, the company seems to be doing much better. The big question is whether the turnaround is sustainable. The company is investing heavily in technology in an effort to continue its record of success. This case examines GM up to its reorganization and also details its current strategies.

Lockheed Martin: Dealing With Dependence On A Single Customer, Timothy Kyle Benusa, Sam Gottwald, Jeffrey S. Harrison, John Reed

Robins Case Network

Lockheed Martin is a giant in the aerospace and defense industry, and obtains more than four fifths of its revenues from governments for national defense. Budget deficits have caused the United States and other governments to carefully evaluate the amount they allocate to defense, and sharp cuts are anticipated. What can Lockheed Martin do to deal with reductions in demand from its most important customer?

Governance And Executive Compensation In Nonprofits, Kevin F. Hallock

Economics Faculty Publications

Corporate governance has attracted much attention lately, justifiably many would argue. In the past couple decades, important legislative changes and public pressure have driven rapid changes in board governance and reporting, much focused on executive compensation, in particular. Still, there seems to be less focus on these issues in nonprofit organizations. This despite the fact that more than one-quarter of Americans volunteered through or for an organization last year, with the likely majority of these organizations being nonprofits. Adjusting for organization size, however, cash pay is not that different in for-profits and nonprofits. Resources exist for helping nonprofit boards govern …

Why Do We Tip?, Kevin F. Hallock

Economics Faculty Publications

Some economists may argue that the billions of dollars a year spent on tipping are difficult to understand. After all, there is no requirement to tip. In a recent article "Why Tip? An Empirical Investigation for Tipping Car Guards" (Journal of Economic Psychology, February 2010), Stephen G. Saunders and Michael Lynn summarize potential reasons for tipping as: to increase the probability of good service upon repeat business, to reward good work, to redistribute income to service workers, to avoid societal disapproval or gain societal approval and to conform to internalized norms. Tipping hair stylists and babysitters clearly fits into the …

Massive Kinked Bonuses, Kevin F. Hallock

Economics Faculty Publications

While most people are paid by the hour or with a yearly salary, some are also paid bonuses. And, some are paid very large, all-or-nothing bonuses. The author's favorite recent example is from last summer when golfer Darren Clarke earned a $3-million bonus from his sponsor. But it was how the payout was structured more than the amount that so intrigued him -- his sponsor's payout was all or nothing. How people are paid is fascinating. It is particularly interesting in this case of very, very large bonuses. The sports odds that Darren Clarke would win the tournament going into …

Will It Be A Tough Year?, Daniel D. Selby, W. Darrell Walden

Accounting Faculty Publications

While there may be some glimmers of hope about a turnaround to the U.S. economy, such as decreasing unemployment, Virginia CPAs aren't betting on a huge recovery in the next year.

The second annual VSCPA Economic Outlook Survey reveals Virginia CPAs are more pessimistic about the United States and Virginia economies than they were last year, but they are actually more optimistic about Virginia's economy compared to the United States as a whole. Likewise, VSCPA members continue to feel good about the economic outlook in Virginia relative to neighboring states.