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CEO pay-performance relationship is a topic that has been largely discussed and researched. Questions still remain on precisely how CEO remuneration is related to company performance. Recently, attention has shifted from how much executives are paid to how they are paid. The purpose of this paper is to find how CEO compensation structure relates to company performance in the auto industry. In order to achieve this aim, the CEO compensation is broken down into four components, namely: base salary, bonus, stocks and stock options, and pension. The company performance is measured by change in market value, since market information is forward looking, meaning future performance might be anticipated in advance by the markets. As such, decisions made whose positive or negative effects may occur later in the future are, if known by investors, priced into the market value. Each compensation component relative the total was tested for correlation with respective market capitalization change. However, the insignificant statistical results conclude that the compensation structure follows a relatively random pattern. Hence, no statistically significant relationship between CEO compensation structure and firm performance in the auto industry was found. The findings that there are no significant performance improvements for firms having a relatively bigger proportion of performance-based pay means that underlying theories, such as agency theory, may not be applicable in the industry.

An increasing number of researchers are beginning to explore leadership effectiveness in the context of language. To gain a better understanding of what constitutes an effective leader, particularly in the context of transition (exiting or entering leadership role), the current project examined Chief Executive Officer (CEO) language use in quarterly conference calls and its' association with company performance. Three research questions were asked: 1) What language patterns are associated with an outgoing CEO versus an incoming CEO? 2) To what degree does CEO language change depending on whether company performance increases or decreases in the year prior to exiting tenure or subsequent to their entering tenure 3) To what degree does CEO language predict company performance and company performance predict language use? In order to answer these questions, language use in the question and answer portion of quarterly conference calls was examined for 215 companies in the year prior to old CEO departure and in the first year for new CEO. Computerized text analysis was used to examine language associated with self-focus, other-focus, and positive and negative affect. Results suggest that old and new CEOs use distinctive language patterns when they are entering and exiting their leadership positions. Language was found to predict company performance and company performance was found to predict language. The current project points to the power of language as a tool to explore leadership effectiveness in the context of transition. Specifically, language analysis can help identify degree of old CEO detachment and new CEO assimilation within their company. In addition, language can be used as a marker of company performance. / text

This thesis investigates the monitoring effect from institutional ownership on bidder Chief Executive Officer (hereafter CEO) compensation in mergers and acquisitions (hereafter M&A) as well as the shift in compensation structure. While it is well-established in the literature that bidder CEO compensation soars significantly after conducting such transactions, the sources of the growth are left unclear. One major argument, the traditional theory, proposes that the growth derives from additional wealth created to shareholders in M&A, because according to the nature of compensation contract, CEOs’ interests are effectively aligned with shareholders’ benefits. On the other hand, scholars of managerial power theory argue that managerial power is stronger than shareholders’ oversight, so managers use M&A as a cover to expropriate wealth from shareholders. Whether the traditional theory or the managerial power theory dominates depends on the presence of optimal contract and the effectiveness of corporate governance. Institutional owners have more motivation and resources to restrict managerial behaviour than diffused owners. Thus, the change in CEO compensation following M&A and the driving factors behind the change could be different in firms with different types of ownership. After examining the 268 merger events from 266 US public non-family bidding firms from 2001 to 2005, this study finds that the magnitude of increase in CEO cash-based compensation is significantly alleviated in the presence of large institutional shareholders, and that the increase seems to be positively related to good short-term performance rather than managerial power. However, the concentrated institutional ownership does not seem to affect CEO equity-based compensation or the change in compensation structure. Besides, we do not find any significant relation between firm long-term post-acquisition performance and the market reaction to the announcement of M&A. Thus, we propose that without a reliable indication from short-term performance, large institutional shareholders could have problems in understanding the potential impact of M&A and they might adjust CEO equity-based compensation in a serial process after M&A.

The study explores the role that the CEO plays in the facilitation of the Strategic Management Process (SMP) within the small and medium sized companies on the JSE with a turnover between R10 to R80 mil. In answering the question “Is the facilitation of the SMP vested in the CEO alone or does he/she share the overall responsibility with Executives, Functional Managers, Supervisors or Consultants? In response to this question the findings purport that the majority view (69%) strengthen the CEO’s influential role in the facilitation of the SMP. This was evident within the launching and growth phase of the company, where the owner plays a big role as the visionary and as there is no formal distinction between the facilitation and the SMP. In contrast, we have to acknowledge the minority view (31%) of CEO’s who engages Executives, Functional Managers, Supervisors, Consultants and other selected personnel in strategic discussions, in ways to leverage their perspective and insights and create shared meaning and ownership. This could be used to develop skills in facilitation, reaffirm team norms and develop agility to respond timeously and strategically to rapid change. This bridges the transition from the higher growth phase and lower maturity phase of the company. For that reason this will enhance decision making, creativity, collaboration, enumerate core values and stimulate growth within the company.

This study examines the effectiveness of Say on Pay (SoP) regulation as a corporate governance mechanism in the context of M&A deals. Using a large sample of U.S. firms over the 2005-2017 period, this study finds that, in the post-SoP period, overall CEO pay growth rate declines and CEO pay to acquisition performance sensitivity improves following M&A activities. This supports ‘SoP governance’ hypothesis, which proposes that SoP regulation will restrict CEOs self-fulfilling behaviour. In a macro-economic set-up, the introduction of SoP regulation was intended to discipline top managers by giving shareholders an opportunity to express their opinion on CEO compensation. It was therefore expected that, in the post SoP-era, CEOs will experience a lower growth in their pay package following M&A deals. On the other hand, the relation between SOP voting approval rates and CEO compensation following M&A activities is unidirectional. Irrespective of the performance of M&A deals, it is observed that CEOs with higher shareholder voting approval experience a significant positive change in their compensation level after an M&A deal. We term this as a ‘reliable CEO’ hypothesis. According to the ‘reliable CEO hypothesis, a very high voting percentage may legitimize CEOs action and embolden CEOs to carry out more risky ventures such as M&As. Since there is an established relation between risk and return, shareholders would like CEOs to take appropriate risks to increase firm value. A reliable CEO, who enjoys a high degree of shareholders’ support, should not be penalized for taking more risky ventures that are intended to increase shareholders’ wealth. Our results confirm this viewpoint.

It is necessary to address the barriers experienced by female middle managers in the coal mining industry in order to ensure their retention and personal growth. Mining in South Africa is still a male dominated industry. Prior to 1996, women were not allowed underground until the promulgation of the Mine Health and Safety Act of 1996. It is almost 12 years since women were allowed underground, but very few women are visible in management positions in the coal production environment. A minimum of 35 middle managers in the coal mining industry participated in both the quantitative and qualitative part of the research. The research reveals that human resources department is more masculine characteristic than production, financial and technical departments. The latter three are androgynous. Both male and female managers perceive a “successful manager” as androgynous, a transition from “think manager, think male”. This also contradicts a similar study carried out in European Banks, finding female managers to be masculine. There was no significant difference found in this research between male and female managers regarding their perceptions of what constitutes a “successful manager”. Findings from the research will assist organisations in the coal mining industry to understand barriers affecting the advancement of women in management. The research will also provide recommendations to organisations on how to change their cultures and work environments in order to develop suitable environments for women managers to flourish and achieve their potential. Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

The market consensus during the financial crisis was that financial sector CEOs were engaged in excessive risk taking induced by compensation practices. Thus, the primary focus of this paper is to determine whether empirical evidence supports this assertion. As such, I examine bank CEO compensation, bank risks, and the relation between bank CEO risk taking incentives and bank risks and the effect of the 2007/9 financial crisis on this relation. I find that banks on average reduced their exposure to credit, capital, total, and unsystematic risks, and increased their exposure to liquidity, portfolio, off-balance sheet and (accounting) foreign exchange risks, from 2003 to 2006. These trends largely reversed during 2007 to 2009. During the 2007/9 financial crisis, banks experienced significant structural shifts in all risk indicators (except for capital and foreign exchange risks) which increased significantly consequent on the economic downturn. I also find that banks remained highly sensitive to changes in short- and long-term interest rates and foreign exchanges rates throughout the period. My findings also support a bank size effect. I observe consistent real growth in CEO base salary annually, from 2003 to 2009, which suggests that there is resilience in this form of compensation to the financial crisis. However, only small banks paid significantly higher base salary during the financial crisis to offset the similar decline in annual bonus payments caused by deteriorating financial and market performances during that time. I find that CEO portfolio option values were more responsive to changes in total risk during the pre-financial crisis period (2003 to 2006) than during the financial crisis (2007 to 2009). Also, I find evidence of banks size effects in compensation components, compensation structure and compensation sensitivity. My results are robust to other sample formations and statistical indicators. After adjusting for the simultaneity bias between bank CEOs' risk taking incentives (measured by the sensitivity of CEO option portfolio and pay for performance sensitivity) and bank risks (using accounting and market based measures), my findings reveal significant shifts in the relation between compensation and bank risks during the financial crisis. Specifically, during the financial crisis, CEOs with more sensitive pay for performance were related to banks with greater capital risk, and banks with higher portfolio risk had CEOs with more sensitive pay for performance. Also, banks with greater total and unsystematic risks during the financial crisis had CEOs with less risk taking incentives. Other indicators during the financial crisis show that less stable banks had CEOs with less risk taking incentives, while banks with greater asset return risk had CEOs with less sensitive option portfolios. Overall, these results do not support the risk inducing incentives of bank CEO compensation especially during the financial crisis.

Family firms are ubiquitous around the world. Family involvement in family businesses gives rise to unique features that not only make family firms behave distinctively from their nonamily counterparts but also lead to great variations among such firms. From an innovation perspective, while family firms are regarded as conservative businesses that lack an innovation spirit in some studies, others recognize family firms as key economic drivers demonstrate entrepreneurial spirit. This dissertation is an attempt to advance the understanding of family firm innovation heterogeneity by focusing on the role of family CEOs. In particular, this research explores what idiosyncratic resources and capabilities are generated from family management, specifically when a family member holds the CEO position. Employing a capability-based perspective of firm innovation, this research posits that the impact of a family CEO on firm innovation is twoold. Family CEOs have a direct impact on firm innovation due to the distinctive resources possessed and the unique goals pursued. Family CEOs also have an indirect impact on firm innovation via the configuration and orchestration of other top management team (TMT) members’ competencies, which manifests as high-order, idiosyncratic managerial capabilities. Therefore, superior or inferior family firm innovation is the result of both TMT members’ unique competencies acquired and developed by family firms as well as family CEOs’ idiosyncratic managerial capabilities. A randomly selected sample of 250 high-technology firms was used for the empirical tests. Findings suggest that family CEOs have a direct impact on firm innovation input and output and that family CEOs configure and orchestrate TMT resources distinctively compared to their professional counterparts. The results reveal theoretical implications for both family business and firm innovation and offer practical implications for leaders of family firms.

I investigate the role of organizational form and ownership structure in corporate governance by examining CEO turnover decision in the property-casualty insurance industry. The likelihoods of turnover and non-routine turnover are significantly and negatively associated to firm performance, and the outside succession dominates when non-routine turnover occurs. Further, the firm's magnitude of turnover-performance sensitivity depends on its quality of the corporate governance mechanisms which are determined by organizational form and ownership structure. The sensitivity of non-routine turnover to firm performance is lower in mutuals than publicly held non-family firms. Non-family-member CEOs in publicly listed family firms have the highest likelihoods of turnover and performance-turnover sensitivity among all types of companies. Manager-owned stock insurance companies have the lowest turnover rate and sensitivity of non-routine turnover to firm performance. Also incoming successors mainly come from the controlling family no matter what the turnover type is. / Business Administration/Risk Management and Insurance