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.

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.

The compensation of CEO’s has been at the forefront of the public’s mind for the past few years. During the recession, one could not go a day without hearing about the atrocious salaries and bonuses that executives were being paid. Although it only recently became an explosive topic, academics have been researching all aspects of compensation for many years. One of the earliest looked at the idea of pay for performance (Jensen and Murphy 1990), and the field has taken off from there. Many studies have been done on the determinants of compensation, and I was interested in how age relates to compensation. I created a model for determining compensation, but also took it one step further and looked at the compensation structure across different industries as well. I found that age did indeed influence compensation levels, but that it only had some effect on pay structure and only in certain industries.

Whether it is Forbes, The Globe & Mail, The Wall Street Journal or Harvard Business Review, one can¡¦t help but notice that most accounts of business mergers are about what went wrong! In fact, over 70% of all mergers and acquisitions fail to achieve original financial expectations. That is a traumatic statistic. Additionally, although the merging entities give a great deal of importance to financial matters and the outcomes, HR issues are the most ignored ones. To be ironical, many studies have shown that most of the mergers fail to bring out the desired outcomes due to ¡§people-related¡¨ issue. The uncertainty brought out by poorly managed HR issues in mergers and acquisitions have been the major reason for these failures. The human resource issues in the mergers and acquisitions (M&A) can be classified in two phases the pre-merger phase and the post merger phase. Some literature provides ample evidence of difference in between the human resource activities in the two stages: the pre-acquisition and post acquisition period. However, we will focus on post acquisition period. The post acquisition period involves an assessment of the cultural and organizational differences, which will include the organizational cultures, role of leaders in the organization, and the management styles. The usual impacts, such as high turnover rate, decrease in the morale, motivation, and even lead to M&A failures. The other issues in the M&A activity are the changes in the HR policies, downsizing, layoffs, stress on the workers, and information system issues. As a result, human resource system issues in M&A activity are occupying a crucial position, indeed, human resource planning, compensation designs, performance appraisal system, employee development and employee relations should be given in the priority. Beside, the M&A activity also causes changes in their well defined career paths and future opportunities in the organization. Some employees also have to be relocated or assigned new jobs. Accordingly, HR will place employees in a completely different situation with new job profiles and work teams or design the job rotation programs. This may pose a tremendous impact on the performance of the employees. Therefore, HR may also need to develop a variety of training system and communication system to rebuild self-esteem of each employee. Those programs will enhance employees to obtain ability and create their potentials. Finally, the compensation structure among the organizations may also have a unavoidable difference, for example, one of firms may have performance based pay while other may have higher component of fixed pay; Hence the differences in compensation structure and performance appraisal systems also need to be re-evaluated so as to bring equity in the human resource systems and to treat employees at the equal level. Simultaneously, the employee relations issues will gain more importance in the acquisitions of Taiwan¡¦s industries. The power equation between management and unions is bound to change with the acquisition. The acquiring management also needs to keep track of number of unions in the workplace and equations between HR department and unions. Hence, developing a harmony relationship should be put in the first place. To sum up, this will require study of management-union equation, employee contracts, political linkages of the unions, compensation related clauses, number of union and dynamics between the unions. To sun up, once company accomplish those conditions, it will elevate the successful rate of M&A.

How to increase the extent of sales competency and growth need strength of salespeople would affect individual or organizational performance strongly. This study intends correlating compensation structure with salespeople¡¦s job performance. In this study compensation structure is independent variables, job performance is dependent variables, the distributive equity is a mediator. Besides, we defined the working experience and sales competency as a moderator between the compensation structure and distributive equity, and growth need strength is defined as moderator between the distributive equity and job performance. The subjects of this study are 548 salespeople of a department store in Kaohsiung. This research used the questionnaires. The data were analyzed by reliability analysis, factor analysis, one-way ANOVA and hierarchical regression analysis to discuss the relationships between compensation structure, distributive equity and job performance for salespeople. Besides, the mediating effect of distributive equity and the moderating effect of work experience, sales competency and growth need strength are also discussed. The findings of the study are as follows. (1) Job-based pay correlates positively with the internal equity perception; skill-based pay and performance-based pay correlates positively with the external equity perception. (2) The internal equity perception correlates positively and significantly with working efficiency and attitude, individual equity perception also has significantly positive correlation with job involvement and performance. (3) Mediating effect of distributive equity perception is not significant. (4) Working experience cannot generate moderating effect between compensation structure and distributive equity. (5) Correlation of job-based, skill-based and performance-based pay determined by sales competence and compensation structure creates intervention on perception of both external and internal equity. (6) Growth need strength and perception of external and internal equity under distribution equity also cause intervention on involvement in and performance of work. According to the results, we offer the following suggestions: (1) For retail counters, compensation structure and employees¡¦ distribution equity perception should be highly regarded. Furthermore, strategies of recruitment should be enhanced, and a comprehensive system of on-job training shall be established in order to improve employees¡¦ performance. (2) For salespeople at the retail counters, they should strengthen their competitiveness, understand the meaning of working as a salespeople, develop a correct attitude towards serving customers, and stick to the customer-oriented concept.

In this dissertation, I study the influence of monitoring by institutional investors on corporate behavior within the context of CEO compensation-based incentives. I find that institutional investors provide an executive with higher levels of compensation sensitivity with respect to a firm’s equity price (Delta). In contrast to prior literature, however, once I control the dynamic nature of the data, institutional investors do not affect compensation sensitivity with respect to a firm’s equity risk (Vega). Instead, I find that institutional investors appear to influence the risk profile of firm through the firm’s investment, financing and diversification policy choices even after I control for the CEO’s compensation structure. The results suggest that compensation-related incentives to increase risk (i.e. vega) and monitoring by institutional investors are substitutes of each other in that both can offset the managerial incentives to reduce risk that stem from greater levels of compensation delta. These results are robust to potential endogeneity problems that may arise due to the dynamic nature of panel data.

Insider trading and earnings management (EM) have traditionally been associated with fraud and corporate scandals. Corporations involved in fraudulent financial reporting or earnings manipulations were assumed to have used insider trading patterns to manipulate earnings, thereby concealing information from investors. The purpose of this quantitative, non-experimental study was to examine the association between insider trading patterns and EM citations among a randomly selected sample of publicly traded companies. The research question pertained to the association between the number of EM citations and whether a firm exhibited patterns of insider trading among publicly traded firms. The theoretical framework was based on accounting, auditing and financial theories. Archival data were collected in the form of financial statements from annual reports of 77 companies submitted to the Securities and Exchange Commission. A multiple linear regression was used to answer the research question to determine whether there was an association between insider trading patterns and EM. Results of descriptive statistics and regression analysis revealed that, after controlling for the firm size, a significant association existed between the number of EM citations and patterns of insider trading in the sample of publicly traded firms. A positive relationship, wherein firms with patterns of insider trading had more EM citations as indicated from the regression results. These findings may encourage investors, regulators, auditors, the public, and other interested parties to work with researchers to foster confidence in financial markets and the accounting profession, and to redeem the mistakes made by companies in the past.

This paper investigates the effect of CEO compensation structure on the risk-taking of the firms in Sweden. In addition, the study examines whether the gender of the CEO plays a role in this relationship. In the recent decades, there has been a drastic increase in the use of variable pay in the CEO compensation package, motivated by the alignment of risk preferences between shareholders and CEOs. However, researchers have failed to reach a unanimous conclusion regarding the effect of variable pay on risk-taking. This study examines the companies listed on Nasdaq OMX Stockholm, comprising 643 observations during the three-year period from 2017- 2019. The results from this study find no positive relationship between compensation and risk-taking as predicted by the agency theory. The study results confirm no or negative relation, depending on the risk measure; indicating that increased CEO variable compensation reduces firm risk through less financial leverage and no significant relationship is found between variable pay and volatility of stock return. Moreover, when examining the gender aspect of risk-taking, no significant difference is found and gender has no impact in the effect of compensation structure on risk-taking.

CEO compensation is an important issue since shareholders, politicians, regulators, and the media have different opinions on the appropriate level. Critics argue that CEO compensation is excessive due to the weak link to firm performance, but even though the field has been thoroughly researched there are mixed findings regarding the relationship between CEO compensation and firm performance. Literature suggests that this could be due to that each economy is unique and has its specificities when determining CEO compensation. CEO compensation in Sweden is generally lower than in the US and Britain, but the performance of the firm is the same or even better. Therefore, the aim of this paper was to study the relationship between CEO compensation and firm performance in the Swedish context. Through a univariate, bivariate, and multivariate analysis of 38 firms on the Nasdaq OMX Stockholm, our findings show that there is no significant relationship between CEO compensation and firm performance in Swedish listed firms when using standard control variables. This result is more consistent with the managerial power theory and less with the agency theory and contract theory. The findings suggest that there is no alignment between Swedish CEOs' compensation incentives and the shareholders' interest (i.e., firm performance).

1 Abstract The equity-based incentives are considered to be one of the instruments helping to motivate executives. The use of this compensation framework should in theory tackle and mitigate the agency problems, and prevent the possible attempts of managers to pursue their own interest over the interests of shareholders. The literature focusing on the effects differs greatly. There is no conformity over the effect of equity compensation on company performance. This research study the effect of CEO-related equity incentives and stock ownership on company performance. The main finding is the positive effect of the equity incentives measured by the percentage of CEOs' equity- based compensation on company performance proxied by the change in Tobin's Q. The thesis does not find any significant effect of insiders' stock ownership. The dataset of 107 publicly traded US companies is used for the empirical analysis. The results are estimated based on a fixed effects model and pooled ordinary least squares. This thesis contributes to the ongoing debate over the effects. It also widens the narrow literature on the structure of compensation. JEL Classification M120 Keywords Equity-based, CEO, compensation structure, equity ownership, company performance Author's e-mail theo.sarec@gmail.com Supervisor's e-mail...