Regulatory Constraints On Ceo Compensation

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Regulatory Constraints on Executive Compensation

Author : Paul L. Joskow
Publisher :
ISBN 13 :
Total Pages : 67 pages
Book Rating : 4.:/5 (357 download)

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Book Synopsis Regulatory Constraints on Executive Compensation by : Paul L. Joskow

Download or read book Regulatory Constraints on Executive Compensation written by Paul L. Joskow and published by . This book was released on 1993 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the influence of economic regulation on the level and structure of executive compensation. We find substantial and persistent differences in CEO compensation between firms subject to economic regulation and those in unregulated industries. CEOs of regulated firms are paid substantially less, on average, than their counterparts in the unregulated sector. In particular, in the electric utility industry, the sector which is most tightly regulated and for which we have the most data, CEOs average only 30% to 50% of the compensation earned by the CEO of a comparable firm in the unregulated sector. Compensation in the regulated sector tends to be more heavily weighted toward salary and cash and away from incentive-based forms of pay (such as stock options), and tends to be less responsive to variations in firm financial performance. The pattern of compensation discounts across industries, over time, and between firms in the electric utility industry is broadly consistent with the presence of binding political constraints on executive pay, as medicated through the regulatory process.

Regulatory Constraints on CEO Compensation

Author : Paul L. Joskow
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Regulatory Constraints on CEO Compensation by : Paul L. Joskow

Download or read book Regulatory Constraints on CEO Compensation written by Paul L. Joskow and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Political Constraints on Executive Compensation

Author : Paul L. Joskow
Publisher :
ISBN 13 :
Total Pages : 33 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Political Constraints on Executive Compensation by : Paul L. Joskow

Download or read book Political Constraints on Executive Compensation written by Paul L. Joskow and published by . This book was released on 2010 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study explores the effect of regulatory and political constraints on the level of CEO compensation for 87 state-regulated electric utilities during 1978-1990. The results suggest that political pressures may constrain top executive pay levels in this industry. First, CEOs of firms operating in regulatory environments characterized by investment banks as relatively `pro-consumer' receive lower compensation than do CEOs of firms in environments ranked as more friendly to investors. Second, CEO pay is lower for utilities with relatively high or rising rates, or a higher proportion of industrial sales, consistent with earlier research that describes political pressures on electricity rates. Finally, attributes of the commission appointment and tenure rules affect CEO compensation in ways consistent with the political constraint hypothesis: for example, pay is lower in states with elected commissioners than in states where commissioners are appointed by the governor, all else equal. Despite apparently effective pressure to constrain pay levels in this sector, however, we find no evidence of related intra-industry variation in the sensitivity of pay to firm financial performance.

Political Constraints on Executive Compensation

Author : Paul L. Joskow
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (318 download)

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Book Synopsis Political Constraints on Executive Compensation by : Paul L. Joskow

Download or read book Political Constraints on Executive Compensation written by Paul L. Joskow and published by . This book was released on 1994 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study explores the effect of regulatory and political constraints on the level of CEO compensation for 87 state-regulated electric utilities during 1978-1990. The results suggest that political pressures may constrain top executive pay levels in this industry. First, CEOs of firms operating in regulatory environments characterized by investment banks as relatively pro-consumer' receive lower compensation than do CEOs of firms in environments ranked as more friendly to investors. Second, CEO pay is lower for utilities with relatively high or rising rates, or a higher proportion of industrial sales, consistent with earlier research that describes political pressures on electricity rates. Finally, attributes of the commission appointment and tenure rules affect CEO compensation in ways consistent with the political constraint hypothesis: for example, pay is lower in states with elected commissioners than in states where commissioners are appointed by the governor, all else equal. Despite apparently effective pressure to constrain pay levels in this sector, however, we find no evidence of related intra-industry variation in the sensitivity of pay to firm financial performance

Pay Without Performance

Author : Lucian A. Bebchuk
Publisher : Harvard University Press
ISBN 13 : 9780674020634
Total Pages : 308 pages
Book Rating : 4.0/5 (26 download)

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Book Synopsis Pay Without Performance by : Lucian A. Bebchuk

Download or read book Pay Without Performance written by Lucian A. Bebchuk and published by Harvard University Press. This book was released on 2004 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance.

Regulating Executive Pay

Author : Nancy L. Rose
Publisher :
ISBN 13 :
Total Pages : 34 pages
Book Rating : 4.:/5 (223 download)

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Book Synopsis Regulating Executive Pay by : Nancy L. Rose

Download or read book Regulating Executive Pay written by Nancy L. Rose and published by . This book was released on 2000 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study explores corporate responses to 1993 legislation, implemented as section 162(m) of the Internal Revenue Code, that capped the corporate tax deductibility of top management compensation at $1 million per executive unless it qualified as substantially performance-based.' We detail the provisions of this regulation, describe its possible effects, and test its impact on U.S. CEO compensation during the 1990s. Data on nearly 1400 publicly-traded U.S. corporations are used to explore the determinants of section 162(m) compensation plan qualification and the effect of section 162(m) on CEO pay. Our analysis suggests that section 162(m) may have created a focal point' for salary compensation, leading some salary compression close to the deductibility cap. There is weak evidence that compensation plan qualification is associated with higher growth rates, as would be the case if qualification relaxed some political constraints on executive pay. There is little evidence that the deductibility cap has had significant effects on overall executive compensation levels or growth rates at firms likely to be affected by the deductibility cap, however, nor is there evidence that it has increased the performance sensitivity of CEO pay at these firms. We conclude that corporate pay decisions seem to be relatively insulated from this type of blunt policy intervention

Executive Pay

Author : Ira T. Kay
Publisher :
ISBN 13 :
Total Pages : 20 pages
Book Rating : 4.E/5 ( download)

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Book Synopsis Executive Pay by : Ira T. Kay

Download or read book Executive Pay written by Ira T. Kay and published by . This book was released on 2008 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Research Handbook on Executive Pay

Author : John S. Beasley
Publisher : Edward Elgar Publishing
ISBN 13 : 1781005109
Total Pages : 553 pages
Book Rating : 4.7/5 (81 download)

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Book Synopsis Research Handbook on Executive Pay by : John S. Beasley

Download or read book Research Handbook on Executive Pay written by John S. Beasley and published by Edward Elgar Publishing. This book was released on 2012-01-01 with total page 553 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research on executive compensation has exploded in recent years, and this volume of specially commissioned essays brings the reader up-to-date on all of the latest developments in the field. Leading corporate governance scholars from a range of countries set out their views on four main areas of executive compensation: the history and theory of executive compensation, the structure of executive pay, corporate governance and executive compensation, and international perspectives on executive pay. The authors analyze the two dominant theoretical approaches – managerial power theory and optimal contracting theory – and examine their impact on executive pay levels and the practices of concentrated and dispersed share ownership in corporations. The effectiveness of government regulation of executive pay and international executive pay practices in Australia, the US, Europe, China, India and Japan are also discussed. A timely study of a controversial topic, the Handbook will be an essential resource for students, scholars and practitioners of law, finance, business and accounting.

The Regulation of Executive Compensation

Author : Kym Maree Sheehan
Publisher : Edward Elgar Publishing
ISBN 13 : 0857938339
Total Pages : 255 pages
Book Rating : 4.8/5 (579 download)

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Book Synopsis The Regulation of Executive Compensation by : Kym Maree Sheehan

Download or read book The Regulation of Executive Compensation written by Kym Maree Sheehan and published by Edward Elgar Publishing. This book was released on 2012-01-01 with total page 255 pages. Available in PDF, EPUB and Kindle. Book excerpt: ïBased on extensive interviews with those directly involved in the executive pay setting process _ executives themselves, remuneration committee members, remuneration consultants, and institutional investors _ this excellent study finally explains how, despite repeated regulation over the past twenty years in both the UK and Australia, limits on the amount executives get paid, and a clear relationship between pay and performance remain as elusive as ever. Dr. SheehanÍs study suggests that by targeting the pay setting process rather than pay itself, regulation may have contributed, albeit unintentionally, to the endless upward ratcheting of absolute levels of executive pay.Í _ John Roberts, University of Sydney, Australia ïFor those that believe executive remuneration in the UK and Australia is too high and poorly aligned with company performance, this book provides an excellent analytical framework and strong arguments in favor of greater shareholder oversight of remuneration practices and pay levels. It is well-written, carefully argued and persuasive in its treatment of the subject. I wholeheartedly recommend it.Í _ Randall S. Thomas, Vanderbilt University Law School, US In this timely book, Kym Sheehan examines the regulatory technique known as ïsay on payÍ _ where shareholders vote on executive compensation in an annual, advisory vote on the remuneration report. Using the model of the regulated remuneration cycle, and drawing upon evidence of its operation from interviews, voting data and remuneration reports from UK and Australian companies, the book demonstrates whether say on pay can operate successfully to both constrain executive greed and ensure accountability exists for company performance and decision-making. The Regulation of Executive Compensation is essential reading for corporate governance academics, remuneration consultants, company directors, regulators, pension and superannuation fund trustees and unions. Politicians and their policy advisers, lawyers, accountants and anyone concerned about the corporate governance of listed companies will find much to interest them in this detailed study.

Executive Compensation

Author : P. Garth Gartrell
Publisher : West
ISBN 13 : 9780314933546
Total Pages : 391 pages
Book Rating : 4.9/5 (335 download)

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Book Synopsis Executive Compensation by : P. Garth Gartrell

Download or read book Executive Compensation written by P. Garth Gartrell and published by West. This book was released on 2011 with total page 391 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Politics of Pay

Author : Kevin J. Murphy
Publisher :
ISBN 13 :
Total Pages : 62 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Politics of Pay by : Kevin J. Murphy

Download or read book The Politics of Pay written by Kevin J. Murphy and published by . This book was released on 2018 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: The persistent outrage over CEO pay expressed by politicians, the press, media, labor unions, and the general public (but not shareholders) have prompted the imposition of a wide range of disclosure requirements, tax policies, accounting rules, governance reforms, direct legislation, and other rules constraining executive compensation stretching back nearly a century. We analyze the regulations that have substantially damaged the efficacy of CEO pay practices, ranging from the first disclosure rules in the 1930s to the 2018 Trump tax rules. We discuss the political forces behind the regulatory interventions, and assess the continuing unintended consequences of these interventions. Our emerging conclusion is that the best way the government can fix executive compensation is to stop trying to fix it, and by undoing the damage already caused through existing regulations that have, in aggregate, imposed enormous costs on organizations, their shareholders, and social welfare.

Regulating Bank CEO Compensation and Active Boards

Author : Julian Kolm
Publisher :
ISBN 13 :
Total Pages : 55 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Regulating Bank CEO Compensation and Active Boards by : Julian Kolm

Download or read book Regulating Bank CEO Compensation and Active Boards written by Julian Kolm and published by . This book was released on 2016 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the role of using CEO compensation and capital requirements in bank regulation. With a passive uninformed board that delegates the choice of bank strategy to the CEO, requiring a compensation contract where the CEO receives a fixed fraction of total bank payoff eliminates the risk shifting problem and can implement first best; no additional regulatory limit on bank leverage is needed. With an informed, active board that represents shareholder interests, however, there exists no CEO compensation that assures that the socially optimal level of risk is chosen. The optimal policy mix consists of deferred compensation for the CEO, a bonus cap or a compensation that is linear in total payoff, and a constraint on bank leverage. Regulating CEO compensation allows to relax regulatory capital requirements.

Responsible Executive Compensation for a New Era of Accountability

Author : Peter T. Chingos
Publisher : John Wiley & Sons
ISBN 13 : 0471655082
Total Pages : 322 pages
Book Rating : 4.4/5 (716 download)

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Book Synopsis Responsible Executive Compensation for a New Era of Accountability by : Peter T. Chingos

Download or read book Responsible Executive Compensation for a New Era of Accountability written by Peter T. Chingos and published by John Wiley & Sons. This book was released on 2004-04-12 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt: A definitive road map to help companies assess and refine their executive reward strategies. Responsible pay has become inextricably linked with corporate governance and long-term shareholder value creation. Responsible Executive Compensation for a New Era of Accountability shows you how to revamp your executive compensation programs to drive shareholder value creation while adhering to the high standards of the new corporate governance environment. Packed with case studies, diagnostics, and contributions from world-renowned experts in executive compensation, this vital resource offers a comprehensive overview of the critical issues affecting executive compensation practice and theory during this new era. Order your copy today!

Regulation and the Composition of CEO Pay

Author : Arantxa Jarque
Publisher :
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Regulation and the Composition of CEO Pay by : Arantxa Jarque

Download or read book Regulation and the Composition of CEO Pay written by Arantxa Jarque and published by . This book was released on 2013 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: A look at the recent trends in the use of grants of restricted stocks and options in the compensation packages of chief executive officers (CEOs) of large, public U.S. companies reveals that there have been important changes. These changes coincide with the introduction of two new regulations: the modifications of reporting requirements for option grants introduced by the Sarbanes-Oxley Act in 2002, and the adoption in 2006 of revised accounting standards from the Financial Accounting Standards Board (FASB) included in statement no. 123R (FAS 123R), which mandated the expensing of option grants. We find evidence indicating that firms may have responded to these regulations by shifting away from options and into stock. Even though after the two changes there is still a significant portion of firms in the sample that choose to grant options to their CEO (about 55 percent of firms, compared to 67 percent before 2002), alone or combined with stock, the fraction of firms that are awarding options but not stock in a given year decreases from 57 percent before 2002 to 19 percent after 2006. However, while only 4 percent of firms used exclusively stock grants before 2002, this percentage increases over the period we analyze to reach 26 percent after 2006. These trends persist when we control for firm characteristics like size and industry classification, as well as for the level of pay. We also find that different compensation instruments do not appear to be perfect substitutes within compensation packages. Perhaps surprisingly, given the decrease in the popularity of option grants starting in the early 2000s, the relative importance of options in relation to the total amount of compensation has not decreased over time for those firms that still include options in their compensation packages.

Is There a Case for Regulating Executive Pay in the Financial Services Industry?.

Author : John E. Core
Publisher :
ISBN 13 :
Total Pages : 41 pages
Book Rating : 4.:/5 (656 download)

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Book Synopsis Is There a Case for Regulating Executive Pay in the Financial Services Industry?. by : John E. Core

Download or read book Is There a Case for Regulating Executive Pay in the Financial Services Industry?. written by John E. Core and published by . This book was released on 2010 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since at least as early as the 1950s, the press, general public, politicians, and academic researchers have remarked on the high levels of US CEO pay and questioned whether these levels are fair and appropriate, as well as whether executive compensation provides proper incentives. Undoubtedly, executive compensation and incentives will continue to be a hotly debated issue for years to come and we do not contend to settle these disputes in this article. Rather, we begin by highlighting some basic descriptive analysis of CEO pay levels and incentives, in general, as well as a comparative analysis of CEO pay and incentives in the financial services industry. We then describe recent proposals to regulate executive pay in the financial services industry (and more generally), and discuss the merits of such regulation. In summary, although we agree broadly with regulators' views on the principles that should guide executive compensation practices, we believe that many of these principles are already engrained in the typical executive compensation plan. We also have serious reservations about whether several of the regulatory proposals would achieve their stated objectives.

Bank Regulation, CEO Compensation, and Boards

Author : Julian Kolm
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (953 download)

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Book Synopsis Bank Regulation, CEO Compensation, and Boards by : Julian Kolm

Download or read book Bank Regulation, CEO Compensation, and Boards written by Julian Kolm and published by . This book was released on 2016 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the limits of regulating bank CEO compensation to reduce risk shifting in the presence of an active board that retains the right to approve new investment strategies. Compensation regulation prevents overinvestment in strategies that increase risk, but it is ineffective in preventing underinvestment in strategies that reduce risk. The regulator optimally combines compensation and capital regulations. In contrast, if the board delegates the choice of strategy to the CEO, compensation regulation is sufficient to prevent both types of risk shifting. Compensation regulation increases shareholders' incentives to implement an active board, which reduces the effectiveness of compensation regulation.

Executive Compensation Best Practices

Author : Frederick D. Lipman
Publisher : John Wiley & Sons
ISBN 13 : 9780470283035
Total Pages : 336 pages
Book Rating : 4.2/5 (83 download)

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Book Synopsis Executive Compensation Best Practices by : Frederick D. Lipman

Download or read book Executive Compensation Best Practices written by Frederick D. Lipman and published by John Wiley & Sons. This book was released on 2008-06-27 with total page 336 pages. Available in PDF, EPUB and Kindle. Book excerpt: Executive Compensation Best Practices demystifies the topic of executive compensation, with a hands-on guide providing comprehensive compensation guidance for all members of the board. Essential reading for board members, CEOs, and senior human resources leaders from companies of every size, this book is the most authoritative reference on executive compensation.