Contrary to other forms of outside financing, the announcement of a bank loan agreement prompts a positive and significant market return. Throughout the literature, bank loans are deemed special and unique due to multiple benefits accruing to bank borrowers. The short-term positive market reaction is however inconsistent with the long-term underperformance of borrowing firms (Billet et al., 2006). We find that unlike shareholders, CEOs gain from the bank loan relation over the long-term. Specifically, we find that bank loan agreement elicits a significant increase in total compensation through an increase in non-performance based compensation components such as salary, bonus and other compensation. We also notice a smaller proportion of pay-at-risk. Additional results indicate that bank loan agreement significantly reduces the probability of CEO turnover in the subsequent year, and no change in the probability of CEO turnover in the three years following the loan. Generally, the results suggest that subsequent to a major bank loan, CEOs seem to gain enough influence to shield their compensation from the firm's underperformance and to secure employment. In particular, this evidence supports the "uniqueness" of bank loan relations.

Pay-for-performance or performance related pay is a system whereby compensation or rewards is linked to the achievement of targets and goals. The question that is asked: is pay-for-performance aiding in getting employees to perform at their peak? A review was done of literature looking specifically at pay-for-performance and organisations where this has been implemented as well as supporting themes: motivation, job satisfaction, psychological contract, team work and performance appraisal. A survey was conducted among employees in a collections environment in a financial institute in South Africa, where a pay-for-performance scheme was implemented in two departments performing similar functions. Employees in one department received incentive payments and employees in the other did not. A survey was conducted among these employees to measure their attitudes towards pay-for-performance and supporting themes. Difference in the attitudes of the subgroups within the study was also considered. Although both departments agreed that pay-forperformance was a good principle, the department that received the incentive payment more strongly agreed to the pay-for-performance measurements. Some other fascinating observations included general positive attitudes of temporary employees. The role of performance management also delivers some interesting observations. No obvious links could have been made between pay-for-performance and the specified themes. Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

Abstract I compare compensation arrangements of firms with private equity and public debt and firms with arrangements public equity and public debt. In a sample of 77 firms, I find that privately held firms offer less bonus compensation in levels, but more as a percentage of total income, less equity compensation, in levels and as a percentage of total income, and less total compensation. I propose and test three possible explanations for these differences. The first explanation is that managers of private firms own more of the company they manage, and thus less annual equity-based compensation is required to align incentives. The tests I employ do not support this hypothesis. Tests of the second explanation, that difficulties associated with the valuation/liquidity of private equity shares drive differences, were significant. The third explanation is that superior monitoring among firms with private debt drives compensation differences. I find no support for this hypothesis. Taken together, these results are consistent with the explanation that privately held firms compensate their managers differently due to the inherent difficulty in valuing and/or liquidating equity shares.

Thesis (M.B.A.)—Boston University

No description available.

No description available.

This dissertation contains three studies relating to executive compensation clawback policies. In the first study (Chapter 3), I investigate the relation between voluntary clawback adoption and shareholder satisfaction. I find that various measures of shareholder dissatisfaction are associated with an increased likelihood of initial clawback adoption and, for firms that already have one in place, an increased likelihood of clawback enhancement. When investigating the impact of clawbacks on shareholder dissatisfaction, measured with say-on-pay (SOP) voting dissent, I find voting dissent is reduced when clawbacks include a reporting-focused trigger. I also find partial evidence that clawbacks reduce SOP voting dissent associated with abnormal CEO compensation, suggesting that shareholders assign greater value to the clawback policy as the value of abnormal compensation increases. In Chapter 4, I examine the relation between earnings quality and variations in the features of clawback policies: the types of trigger events, the executives covered, the amount of compensation subject to clawback, and board discretion in clawback enforcement. The results suggest that earnings quality increases when clawbacks contain reporting-focused triggers and that more automatic clawbacks improve perceptions of reporting quality. In Chapter 5, I examine the relation between mandatory clawbacks, which are required for firms participating in the Troubled Asset Relief Program (TARP), and both observed earnings quality and perceptions of earnings quality. The findings suggest that mandatory clawbacks are associated with improvements in auditor’s perceptions of reporting quality. However, they are also associated with a greater likelihood of financial restatement, indicating that government mandated clawbacks may reduce the quality of earnings. The results of these studies may be of interest to regulators as they work towards the final rules governing mandatory clawbacks under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. / Business Administration/Accounting

Executive Compensation has received a lot of media and academic attention in the last decade. Much of that attention is focused on the gross levels of compensation and not the component structure of salary, stock, options, etc. that make up a compensation package. This paper examines the executive compensation structures of internet technology firms, which are becoming an increasingly important part of the economy. I use samples of newly public and more established companies from early and recent periods to determine if and how the composition of executive pay has changed from 1997 to 2013. My findings suggest a decrease in the use of both options and salary as a percent of total compensation, with an accompanying increase in stock and overall equity percentages, has occurred between early and recent periods. Additionally, I find there to be less reliance on options and a lower mix of equity-to-salary between firms that have just gone public and more established firms, again with an increased use of stock in the component structure.

The purpose of this project was to examine team compensation systems and to evaluate the impact of their critical elements--level (what to motivate), compensation mixture (what rewards motivate), and employee perceptions (how to motivate)--on team effectiveness. Twenty-three organizations, 108 teams, and 769 team members participated in this study. Project results found that teams that utilized team level rewards, especially when associated with a complete compensation mixture, had significantly higher team effectiveness scores compared to teams that utilized only individual level rewards. With respect to employee perceptions, results found that: (a) perceptions of system understanding, measure controllability, pay-for-performance, and payout frequency, particularly, were significant components of employee compensation system satisfaction; and (b) employee compensation system satisfaction and perceptions of compensation system effectiveness were significantly related.

by Zhou Jun. / Includes "Chinese version of the questionaire". / Thesis (M.B.A.)--Chinese University of Hong Kong, 1993. / Includes bibliographical references (leaves 43-45). / ABSTRACT / TABLE OF CONTENTS / ACKNOWLEDGEMENT / CHAPTER / Chapter I. --- INTRODUCTION --- p.1 / Chapter II. --- DEVELOPMENT OF PROPOSITIONS --- p.7 / Chapter III. --- METHODOLOGY --- p.19 / Chapter IV. --- DATA ANALYSIS --- p.25 / Chapter V. --- RESULTS --- p.30 / Chapter VI. --- DISCUSSION AND CONCLUSION --- p.34 / APPENDICES / BIBLIOGRAPHY