Extant research finds inconclusive evidence about the CEO horizon problem. One possibility is that compensation committees design CEO compensation in a way that discourages retiring CEOs from opportunistic earnings management and R&D reduction. However, compensation committees dominated by co-opted directors may not be as effective as those with fewer co-opted directors in mitigating the CEO horizon problem, because directors co-opted by the CEO tend to bias their decisions in favor of the CEO. I find that compensation committees dominated by co-opted directors are associated with higher CEO compensation packages. I document R&D reduction and accruals management in firms with retiring CEOs and compensation committees dominated by co-opted directors, and find that R&D reduction and income-increasing accruals are less discouraged by compensation committees dominated by co-opted directors when deciding CEO compensation. I also examine the effect of boards of directors and compensation committee characteristics on CEO compensation and on mitigating the CEO horizon problem. I find that CEO compensation positively associates with CEO power, director independence, and the percentage of busy directors, and negatively associates with board of directors and committee size and director ownership. Moreover, I find that retiring CEOs are more likely to reduce R&D expenditures when CEOs have more power, and director tenure is longer; retiring CEOs in firms with large boards of directors and compensation committees are less likely to manage accruals.

This thesis investigates how the Thai public sector, particularly at the provincial level, makes sense of the performance management system (PMS) aimed at driving forward the improvement in public service and enhancing the sustainability of service quality. The study explores the implications of the PMS implementation after the major civil service reform in 2002. The core aspects of this development include the nation-wide implementation of the PMS, the Provincial CEO scheme, as well as the incentive schemes put force to motivate and enhance such development and improvement. Although there is rich literature on performance management, there is limited in the Thai context, particularly at the provincial level. The empirical study relies on a qualitative approach through intensively exploring five provincial case studies. In-depth, semi-structure interviews have been conducted within the provinces, as well as with executives from central agencies, training and development institutes, and key resource persons who are directly involved in the PMS implementation. The data analysis reveals that a strong commitment of the government at policy level brought in support and coordination among central agencies and has altered attention and resources towards the system implementation. Additionally, the PMS implementation together with the promotion of the Provincial CEO scheme has created new challenges for the Provincial Governors and the provincial administration in which there is shown to be a shift from an administrative approach to a more managerial and participative one. The performance agreement (PA) has played a crucial role in improving and evaluating performance, driving public sector development, and linking performance with the monetary incentive schemes. However, the study also finds a limitation of the PA execution in relation to its linkages with incentive distribution to individuals. Furthermore, several incentive schemes are available for different groups of people and cause misunderstanding and demotivating affects which, in turn, has impacts on the PMS as a whole. The findings of this research provide new evidence on the PMS implications at the provincial level in the Thai public sector in which political policies are cascaded down into real practices and execution. Therefore, the result could be considered as extending the knowledge boundary in the context of public management. Crucially, the research highlights significant implications and specified factors enabling and inhibiting success in the PMS implementation.

The objective of this research is to test the expensing of stock options as part of CEO compensation to earnings quality. Agency theory posits a conflict between the CEO's own self-interest and that of the owners who seek to maximize the long term value of their investment. To avoid this conflict compensation should align and bond these parties. Data was retrieved from Compustat, ExecuComp and Corporate Governance databases spanning the years of 2000 through 2009. The Dechow and Dichev (2002) earnings quality model using the change in working capital and error terms taken as the residuals was utilized. All hypotheses used earnings quality as a proxy for management choices and as the predictive power of accruals. The first hypothesis indicated granting of CEO stock options has a positive association to earnings quality. The second hypothesis tests the implementation of SFAS 123 (R) by expensing stock options and the association to earnings quality. The third and final hypothesis utilized the number of BOD members as to compare the association between expensing stock options as part of CEO compensation and earnings quality. Empirical support for all three hypotheses was found and consistent with expectations established by other research using earnings quality methodologies. Both the granting and expensing of stock options as part of CEO compensation has an association to earnings quality. There exists a stronger association between expensing stock options and earnings quality when firms have a larger number of BOD members. Support for agency theory was discovered because all three hypotheses were supported. This study was limited to U.S. firms that were publicly traded on major U.S. exchanges and only CEO compensation. Other executive compensation was not included. These limitations provide opportunities for future research. Knowledge was gained by exploring the earnings quality measures for evidence of bonding and alignment theory. This study extends the research in earnings quality by examining the relationship of granting and expensing of stock options as per SFAS 123 (R). It also contributes to the work in SFAS 123 (R) by testing four years before and after 2005, when implementation occurred.

This research links together disparate literature on family and nonfamily firms, large and small firms, and risk for small firms. The literature is not coherent in one theme: whether family firms operate with greater risk relative to nonfamily firms. Yet the literature finds performance advantage to family firms without an explanation of why family firms on average generate better accounting returns and values relative to nonfamily firms other than for reduced agency costs translated into value. The first essay examines two measures of risk--debt ratio and idiosyncratic risk--of small publicly held family firms relative to nonfamily firms to investigate differences in financial risk between them. Using a unique hand-collected data set of small family and nonfamily firms, I analyze certain firm characteristics (family ownership, family member on the board, size, and dual class status) and find that family and nonfamily firms do not differ in their book-based debt ratios but do differ in their market-based debt ratios. Specifically, I find that family firms that tightly control voting rights through dual class status have higher debt ratios and hence have higher risk than nonfamily firms. Furthermore, I find a positive relation between idiosyncratic risk and family ownership, and I find as the percentage of family ownership increases idiosyncratic risk increases. The second essay utilizes the likelihood of incentive compensation presence and incentive compensation ratio of small publicly held family firms relative to nonfamily firms to investigate differences in CEO dividends and incentive compensation. The tools available for boards of directors to incentivize CEOs to act in accordance with diverse shareholder wishes, including risk-taking, investment selection, and the on-the-job consumption of resources, are stock options, stock grants, and cash bonuses. I argue that agency theory in practice is imperfect in incentive contracting. Specifically, CEO dividends and family ownership reduce the likelihood of the existence of an incentive compensation plan. I find in the presence of CEO dividends that family and nonfamily firms differ in their incentive compensation ratios and the likelihood of incentive compensation. In my sample, I find a significant negative relation between the CEO dividend income ratio and the incentive compensation ratio and between family ownership percentage and the incentive compensation ratio. Lastly, consistent with current literature, I find that growth opportunities positively influence both family and nonfamily firms' incentive compensation ratios.

Audit reporting lag continues to remain an issue of significant interest to regulators, financial statement users, public companies, and auditors. The SEC has recently acted to reduce the deadline for filing annual and quarterly financial statements. Such focus on audit reporting lag arises because, as noted by the Financial Accounting Standards Board, relevance and reliability are the two primary qualities of accounting information; and, to be relevant, information has to be timely. In my dissertation, I examine three issues related to the audit report lag. The first essay focuses on the association between audit report lag and the meeting or beating of earnings benchmarks. I do not find any association between audit report lag and just meeting or beating earnings benchmarks. However, I find that longer audit report lag is negatively associated with the probability of using discretionary accruals to meet or beat earnings benchmarks. We can infer from these results that audit effort, for which audit report lag is a proxy, reduces earnings management. The second part of my dissertation examines the association between types of auditor changes and audit report lag. I find that the resignation of an auditor is associated longer audit report lag compared to the dismissal of an auditor. I also find a significant positive association between the disclosure of a reportable event and audit report lag. The third part of my dissertation investigates the association between senior executive changes and audit report lag. I find that audit report lag is longer when client firms have a new CEO or CFO. Further, I find that audit report lag is longer when the new executive is someone from outside the firm. These results provide empirical evidence about the importance of senior management in the financial reporting process.

Executive remuneration has been discussed extensively in both academia and industry, causing much disagreement. This dilemma is not exclusive to South Africa as executive remuneration has been central in a number of company scandals globally and considered a critical contributor to the global financial crisis. The purpose of this research was to identify and compare the significant CEO pay-performance relationships between the developed and developing economies of Australian and South African publicly listed companies respectively. International comparisons of CEO pay-performance relationships are scarce, with the majority of studies comprising of only single-country analyses. Historical inconsistent remuneration practices of publicly listed companies have resulted in varied effects on company performance and shareholder value creation. CEOs are witnessed receiving large remuneration packages while delivering little shareholder value. Increased public attention has called for stringent corporate governance measures for CEO remunerations schemes. The research study was conducted as an empirical explanatory quantitative study to further understand the relationship between CEO remuneration practices and the financial performance of Australian and South African publicly listed companies. The overarching principal finding of the study was the confirmation of the difference in the significant pay-performance relationships between Australian and South African publicly listed companies, with results indicating that only a negligible portion of the variance in CEO remuneration can be attributed to financial performance measures. The increase in the globally mobility of CEOs has added an additional level of complexity to the pay-performance relationship. Contributing to the field of human resource management and remuneration this study builds on the understanding of CEO pay-performance relationship to maximise shareholder value creation and retain talented CEOs. / Mini Dissertation (MBA)--University of Pretoria, 2018. / Gordon Institute of Business Science (GIBS) / MBA / Unrestricted

As a CEO assumes an important role in an organization, his or her personality, with emphasis on arrogance, may affect a multitude of board members’ attitudes. This study gauges the effect of CEO arrogance on board members’ attitudes, which includes the engagement; cohesiveness; collaboration; job satisfaction; consensual decision making and desirability of the CEO. This investigation drew from existing literature that personality traits affect a leaders’ effectiveness in terms of group performance and followers’ satisfaction (Avolio, Gardner, Walumbwa, Luthans&May, 2004). Through experimental design, actual board meetings were simulated and CEO arrogance was manipulated, mainly by adapting the indicators from the Arrogance Scale in the Workplace developed by Johnson et al. (2010). Experiments were conducted in samples of MBA students and senior management consultants of roughly similar demographics. The findings confirmed that CEO arrogance has a detrimental effect on all the board members’ attitude. Arrogance accounted for almost 60 per cent of the board members’ attitudes ratings. This study is confirms that an arrogant CEO negatively affects the board member dynamics which are essential in maintaining an effective board. This urges the organizations to acquire non-arrogant CEOs to improve the organisation’s productivity. Alternatively, an organization can consider alternatives to dilute a CEO’s arrogance. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

The crucial decisions that impact the performance of an organisation are usually taken by the Chief Executive Officer (CEO). However, little is known about the impact that a CEO's risk appetite has on the decision making processes and its ultimate impact on company performance. A greater understanding of the relationship between CEO risk appetite and organisational performance will facilitate the improvement of strategy formulation for the purpose of managing risk appetite at an executive level.A qualitative exploration into the factors that have been acknowledged as contributory aspects in the development of executive risk appetites highlighted the aspects which had the greatest association to the formation of CEO risk appetite. These aspects were utilised in the formation of an interview schedule that evaluated the perceptions of seven CEOs regarding their risk appetite preferences.Using the findings of the CEO interviews, a model was formulated to quantify CEO risk appetite and test its relationship with company performance, which had been calculated via a quantitative analysis of company financial records.The findings of the analysis into the relationship between CEO risk appetite and company performance indicated a positive linear relationship between the two variables. The research findings regarding the factors contributing to CEO risk appetite also proved consistent with the majority of the literature on the subject.The implication of the findings for South African organisations will be an improved understanding of the relationship between CEO risk appetite and organisational performance and the ability to develop strategy around managing this relationship. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

The financial crises experienced worldwide have contributed to the rising importance of corporate governance. South Africa is unique in that it has strong corporate governance structures and as a result, it would prove useful to assess the effects of these corporate governance structures on critical sectors such as the long-term insurance industry, which is the largest insurance industry in Africa. The objective of this study is to examine the effect of corporate governance mechanisms and firm efficiency in the South African long-term insurance industry using data on 73 long-term insurers from 2007 to 2014 in a two-stage analysis. In the first stage, firm efficiency is estimated using the data envelopment analysis (DEA) bootstrapping technique of Simar and Wilson (2007), which corrects for biases associated with non-parametric techniques. In the second stage analysis, the truncated bootstrapping regression technique is employed to examine the effect of corporate governance on the estimated efficiency scores. The corporate governance variables used were board size, board independence, audit committee size, CEO tenure and audit independence, while controlling for firm size, reinsurance usage and leverage. The findings indicate that long-term insurers in South Africa operated at approximately 21% of their optimal capacity which suggests high levels of inefficiency in the provision of life insurance services. The results of the second-stage analysis identify board size, non-executive directorship, CEO tenure and audit independence as the significant corporate governance indicators that impact on efficiency over the study period. In addition, firm size, reinsurance usage and leverage were also observed to be significantly related to the estimated efficiency scores. The findings suggest that non-executive directors are not as effective as expected, which may be due to a myriad of reasons, such as under-representation on sub-committees, a lack of relevant skills, experience or financial expertise. Insurers should use more stringent criteria to screen potential non-executive directors and provide training and regular updates to adequately capacitate the non-executive directors with the necessary skills and knowledge. The positive relationship between CEO tenure and efficiency suggests that frequent CEO rotation is not advisable. Most of the corporate governance indicators have a negative effect on efficiency, which is not the intended effect. This is an indication that corporate governance measures should not be viii enforced on insurers as a 'one size fits all’ measure, rather, a focus should be placed on corporate governance measures that have the intended impact, such as audit committee independence.

Real earnings management has been a subject of increasing debate ever since the passing of the Sarbanes-Oxley act in the united states. As research has pointed towards real earnings management increasing this has sparked discussions on whether real earnings management is damaging to companies, or if it is benefiting them, or if it lies somewhere in between. Forthis paper we wanted to examine how the financial incentives of a CEO would affect the usage of real earnings management. Are CEO’s being poorly motivated, and as a result harming their companies? To guide the paper,we decide to formulate our research question thusly: How do different forms of CEO compensation affect real earnings management? In this paper we attempt to find correlations between indicators of realearnings management and threedifferent forms of CEO compensation. For our indicators we follow to a paper by Roychowdhury, titled “Earnings Management Through Real Activities Manipulation”and calculate abnormal cash flow from operations, and abnormal production. These indicate usageof overproduction, reduction of discretionary expenses, and moving sales across periods (Roychowdhury, 2006). For forms of CEO compensation,we measure them as a ratio of total compensation. We track salary, bonuses, and stock ownership. In our results we can see that all three of these are significantly correlated to both of our real earnings management indicators. Bonuses have a positive correlation to abnormal production, and a negative correlation to abnormal cash flow from operations. Salary is positively correlated to both our indicators, and ownership is negatively correlated to both our indicators. Our final conclusion is that yes, the makeup of a CEO’s compensation has a significant effect on the usage of real earnings management within the company.