“What determines bond ratings?” has been asked since 1860 when Henry V. Poor, of now Standard & Poors, released his first financial and operational analysis of the railroad industry and is still asked today. The determinants of bond rating studies date back to Fisher (1959) and single out various industries (railroad, manufacturing, industrial, and utility) but do not focus on REITs. REITs are different from other industries in various ways. Literature suggest differences between REITs and non-REIT industries including: the regulatory IRS restrictions regarding REITs, the uncertainty regarding the value of REITs, the number of uninformed investors is greater in the REIT market due to valuation uncertainty, REITs securities behave more like mutual fund securities than like industrial firm securities (Wang et al. (1992), (1995)), and the uncertainty about the value of real estate stocks is greater than that for stocks of industrial firms with operating assets, causing REIT advisors to complain that the stock market underestimates their real value more often than the real value of industrial firms (Hite, Owens, and Rodgers (1987)). This study analyzes the determinants of REIT debt ratings. The determinants are analyzed using ordered probit and multinomial logit regression models. The results of the ordered probit regression model reveal that REIT debt ratings are determined by similar financial characteristics used to analyze determinants for non-REIT industries. Similar to the findings in Horrigan (1966), the data also reveals that liquidity is not as significant to REIT debt ratings as S&P analyst claim. The multinomial logit resuts show that leverage, cash, size, interest coverage, and shareholders right plan are significant to downgrades. Overall, the findings presented here are consistent with non-REIT ratings literature.

This dissertation is composed by two essays that explore the changes in corporate governance around the passage of Sarbanes-Oxley (SOX) 2002. In the first essay, I examine the relation between board structure and compensation as a bargaining game between the board and the CEO. Bargaining game theories describe an endogenous process of determining the structure of director and CEO compensation. The Sarbanes-Oxley Act (SOX) altered the equilibrium of power between the board and CEO by changing the monitoring role of the board. SOX essentially provides a natural experiment to test how a shock to the bargaining game alters the balance of power between directors and the CEO. Using the ratio of director compensation to CEO compensation to proxy for bargaining power, I find a significant increase following the passage of SOX, consistent with directors gaining bargaining advantage. Moreover, firms with strong shareholder rights exhibit even greater evidence of power shifting to the directors. Overall, the results suggest that directors gain more power relative to the CEO in determining compensation plans and strong shareholder rights help firms to align directors' incentives with those of shareholders. In the second essay, I examine the relation between CEO compensation structure and acquirer returns. In the literature, researchers find that executive compensation structures influence corporate acquisition decisions. Equity-based executive compensation should reduce the non-value-maximizing behavior of acquiring managers. A series of corporate reforms such as SOX and the FASB expensing rule affected the structure of CEO equity-based compensation. I find a significant increase in CEO restricted stock compensation and a significant decrease in CEO option-based compensation following these reforms. I also find that CEOs with strong managerial power are more likely to receive more restricted stock in their compensation package after the 2002 reforms. Finally, I find a significant positive relation between the restricted stock compensation of acquiring firm CEOs and abnormal stock returns after 2002. This provides empirical support on the effectiveness of the shift away from options towards restricted stock in executive compensation packages. Restricted stock is associated with better merger decisions.

Innovation is fundamental to long-term business success in technology medium-sized enterprises (MSEs). The owner-CEO interrelationship is likely to set the culture and be an important influence on the enterprise innovation capability. Previous studies of the owner-CEO interrelationship have produced varying results but few have examined the influence on innovation capability. Agency theory assumes that owners and CEOs have contrasting objectives but it is silent when owners and CEOs are in accord. Companies may have varying dominant ideologies, such as entrepreneurialism, managerialism, and paternalism, which likely influence their innovation capability. Using primary data from three different German MSEs, selected for their contrasting ideologies, this study examines how interrelationship influences of the owner-CEO interrelationship have the potential to influence the innovation capability of MSEs. The results show that the influence of the owner-CEO interrelationship on the innovation capability is associated with social and situational influences. This thesis provides an original contribution by developing an “interrelationship influence model” that captures the interrelationship factors that influence innovation capability, namely: action, support, communication, responsibility, power and autonomy. This study has important implications for researchers in corporate governance as well as in innovation. Enterprises aiming to improve their innovation capability should pay attention to interrelationships and the influence of owners as well as to the CEO and the management team.

No description available.

No description available.

This study examines the effect of independent board members on a bank's performance. Roughly 100 banks in the SIC codes of 6020, 6022, 6035, 6036 were used, with data from the year 2003. Several governance variables were also included in this study; they are CEO/Chair duality, management ownership, insider tenure and total assets. P-B, ROA, ROE and ROI measured financial performance. The effect of outside directors was insignificant. However, the results indicated that bank size positively affects how well outsiders on the board monitor the company. Also, this study suggests that management's ownership of the company increases short term performance, while insider tenure decreases it.

Zugl.: Marburg, Univ., Diss., 2009

The essence of running an enterprise which is defined as a system by which the companies are lead and compared is generally set in priority terms. For some, they favour in the first instance to secure the economic efficiency then to scope with the social problems at a later stage---'Shareholder model'. Others are inclined to consider that the priority lies into an environmental, sharing and caring society etc.---'Stakeholder model'. / Where the evolution of the corporate governance is going to lead to? And how does it affect the directors' responsibility? / After a thorough study of its European evolution in particular in France and England, we figure out that raising the black flag of the stakeholder theory will end up into an ideology completely false dislodging the concept of the natural reality around us. On the other side, claiming the predominance of the sole shareholder system will become a dangerous apprehension opposing the objective of this theory: In our perspective we see that the ultimate global wealth of the enterprise in the long run is closely linked to the consideration and the deep satisfaction of the needs and the interests of the different parties joining the enterprise.

Universiẗat, Diss., 2005--Mainz.

Zugl.: Köln, Universiẗat, Diss., 2005.