This research examines the relation between incentive-based compensation and subsequent Real Estate Investment Trust (REIT) performance as well as the determinants of incentive-based compensation for REITs. I propose that REITs either rely on incentive-based compensation to substitute for poor corporate governance practices or may not need to rely excessively on incentive-based compensation to align managers and shareholder interests, given their heavily regulated nature and their corporate governance practices. Using a sample of publicly traded equity, hybrid, and operating REITs for the 1999-2003 period, I find a negative relation between incentive based compensation awards and subsequent stock returns for REITs. Interestingly, this relation is not found when return on assets (ROA) is the measure of performance. These results imply that excessive incentive-based compensation negatively impact future REIT performance from a market perspective, but not an accounting perspective. With regard to the determinants of incentive based compensation, I find that CEO ownership, board of director characteristics, and institutional ownership are consistent determinants of the level of incentive based compensation awarded to REIT CEOs. Overall, the results imply that REIT corporate governance practices substitute for incentive-based compensation, but still, the level of incentive-based compensation paid to REIT CEOs is excessive up to the point that it negatively affects subsequent REIT performance.

This paper analyzes the link between equity-based compensation and created incentives by (1) deriving a measure of incentives suitable for both linear and non-linear compensation contracts, (2) analyzing the effect of risk on incentives, and (3) clarifying the role of the agent's private trading decisions in incentive creation. With option-based compensation contracts, the average pay-forperformance sensitivity is not an adequate measure of ex-ante incentives. Pay-for-performance covaries negatively with marginal utility and hence overstates the created incentives. Second, more noise in the performance measure implies that the manager is less certain about the effect of effort on performance, which in turn makes her less willing to exert effort. Finally, the private trading decisions by the manager have first-order effects on incentives. By reducing her holdings of the market asset, the manager achieves an effect similar to "indexing" the stock or option grant, making explicit indexation of the contract redundant.

This study investigates whether team members work harder and perform better when they are compensated based on both team and individual performance than when compensated based on team or individual performance alone and whether teammates? familiarity with one another influences the effectiveness of the compensation scheme. Four-member ad hoc student teams repeatedly complete an interdependent task on the computer in an experiment in which I manipulate individual compensation plan (flat wage or performance-based incentives), team compensation plan (flat wage or performance-based incentives), and teammate familiarity (identified teammates with pre-experiment interaction ? strong id or unidentified teammates with no pre-experiment interaction ? weak id). Results indicate that while the combination of team and individual performance-based compensation results in the highest performance, the incremental performance boost is higher from the first performance-based reward strategy, regardless of whether it is team or individual. Under both strong and weak identity, offering a combination of individual and team performance-based compensation results in comparable performance, suggesting that lower productivity levels associated with low team identity can be overcome with performance-based compensation. Together these results suggest that, regardless of team identity, firms can benefit from offering both team and individual performance-based compensation. However, companies should understand that the performance bump may be smaller from the second performance-based scheme.

This study investigates whether team members work harder and perform better when they are compensated based on both team and individual performance than when compensated based on team or individual performance alone and whether teammates? familiarity with one another influences the effectiveness of the compensation scheme. Four-member ad hoc student teams repeatedly complete an interdependent task on the computer in an experiment in which I manipulate individual compensation plan (flat wage or performance-based incentives), team compensation plan (flat wage or performance-based incentives), and teammate familiarity (identified teammates with pre-experiment interaction ? strong id or unidentified teammates with no pre-experiment interaction ? weak id). Results indicate that while the combination of team and individual performance-based compensation results in the highest performance, the incremental performance boost is higher from the first performance-based reward strategy, regardless of whether it is team or individual. Under both strong and weak identity, offering a combination of individual and team performance-based compensation results in comparable performance, suggesting that lower productivity levels associated with low team identity can be overcome with performance-based compensation. Together these results suggest that, regardless of team identity, firms can benefit from offering both team and individual performance-based compensation. However, companies should understand that the performance bump may be smaller from the second performance-based scheme.

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From the Asian Finance Crisis in 1997, to many scandals in U.S.A. in 2001, and lots of fraudulent practices for many years in Taiwan, these cases severely injured the investors and the whole society. In fact, before these fraud cases happening, a lot of scholars have proposed that manager can manipulate reports with accounting tactics to manage earnings and window dress the performance of the company. After these scandals bursting, the researches which discuss how to regulate CEO¡¦s behavior by using corporate governance mechanism get more attentions. A lot of researches point out that CEO¡¦s option-based compensation might be one of the reasons which result in the self-interested behavior, and provide their views about the monitoring effects of the corporate governance mechanism. However, the researches that discuss whether CEO¡¦s self-interested behavior will influence the monitoring effects of the corporate governance mechanism are few. This paper divides the pubic listed company that had issued warrants to CEO from 2001 to 2005 into two groups by the ratio of option-based compensation in CEO¡¦s total compensation. We want to know that whether the corporate governance mechanism has the same influence in earnings management and company¡¦s performance in different CEO¡¦s option-based compensation ratio. The corporate governance and compensation variables we used are institutional ownership in the firm, the number of institutional directors, board size, percent of independent outside directors on the board, percent of inside directors on the board, director and executive officer stock ownership, company size, and CEO¡¦s option-based compensation ratio. The conclusions as follows: 1. CEO¡¦s option-based compensation ratio forms the threshold effect to the monitoring effect of the corporate governance mechanism. When CEO¡¦s option-based compensation takes particular proportion of total CEO¡¦s compensation, the corporate governance mechanism will be more effective. 2. The corporate governance mechanism that has significant influence in earnings management and operating performance will be different when CEO¡¦s option-based compensation ratio is different. 3. Among these corporate governance mechanism, percent of independent outside directors on the board is the only one that can have similar and significant influence in earnings management no matter how high the CEO¡¦s option-based compensation ratio is. It may relate to the independence of independent outside directors.

Teacher compensation reforms have been on the rise in recent years, yet research has yet to fully demonstrate how teachers interpret these policies and how they may influence their instructional practices and professional decisions. This qualitative study of a performance pay program in an urban district in Texas drew on cognitive approaches to policy implementation and theories of sensemaking to examine and explicate these issues. Teachers’ experiences in two schools were examined through interviews, focus groups, and document analysis. The experiences of school principals and district policymakers acting as sensegivers to teachers about the program’s goals, purposes, and theory of action were also examined. District policymakers’ understandings of the program varied, and were informed by their positions in the system and their own interests in the program. These differences resulted in a complex program with an array of objectives for teachers to implement in schools and classrooms, as well as varying expectations for teachers’ work, which were not always understood by teachers. With few clear and consistent messages from policymakers, teachers and principals interpreted the program according to their own ideas about important outcomes, and then shaped it to fit their situations. Although accepting of the program, teachers and principals were not always able to focus on it in ways expected by policymakers given other demands on them, particularly those emanating from the accountability system. Some evidence of goal distortion in terms of teachers’ attention to student assignments and mobility was also found. These findings hold implications for cognitive theories of policy implementation, suggesting that teachers’ responses to policies are influenced by the amount of attention they are able to give them, as well as direct sensegiving about policy goals and expectations on the part of policymakers. The findings also suggest that performance pay programs can be expected to be adapted, co-opted, and selectively attended to in order to fit within the contexts in which they are implemented. Thus, policymakers should consider other demands in the policy environment that may compete with performance incentives, as well as the organizational contexts of schools in which they will be implemented. / text

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