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.

No description available.

Call number: LD2668 .T4 1963 B43 / Master of Science

published_or_final_version / Business Administration / Master / Master of Business Administration

No description available.

To empirically test the impact of CEOs' outside wealth on their compensation, I use spousal divorce as a proxy for an exogenous, negative shock to a CEO's outside wealth. I hypothesize that this shock decreases a CEO's risk tolerance. I also expect that the board of directors responds to this decrease by raising the CEO's cash compensation and by increasing the sensitivity of the CEO's compensation to changes in firm value. I find that cash bonuses, restricted stock grants, and option grants increase following a CEO's divorce, consistent with boards reacting to changes in CEOs' outside wealth and risk incentives. I also find that firms' total risk and idiosyncratic risk significantly drop during the year of a CEO's divorce, consistent with a drop in the CEO's risk tolerance. Overconfident CEOs, who are more risk tolerant, do not receive the same increases in compensation following divorce. I find little support for the relation between divorce and compensation being endogenously determined by performance or by poor corporate governance. Overall, the results support predictions that the board of directors takes the CEO's wealth into account when setting compensation and that outside wealth impacts the CEO's risk preferences.

Early-return-to-work (ERTW) programs for injured workers are a relatively new development. While it is widely believed that such programs are the primary means of controlling workers' compensation costs after an injury has occurred, little research has been done on how these programs accomplish that end. This thesis is an exploratory examination of the factors involved in ERTW programs and the relationship between components of ERTW programs for injured workers and organizational outcomes, specifically the cost of medical care and wage reimbursement associated with workers' compensation claims.

<p>In the middle of the financial turmoil, many managers are blamed by journalists or politicians to be responsible for the crisis. For unknown reasons, this crisis born elsewhere than in large quoted companies, has struck top executives and CEOs, accused by an angry public to benefit from excessive compensations. However this wave of protest has highlighted the field of executive compensation and sparked the academic debate regarding the determinants of executive pay, with a particular focus on the relation between pay and performance.</p><p> </p><p>In this paper we discuss the role and attributes of executives, their remuneration schemes and the trend evolution in terms of package components and overall amounts. To delimit our study, we focus on the Anglo-American model only; the most criticized one, especially because of the important part covered by stock options. We conduct a theory review to provide a clear understanding of what executive compensation is and the impact it can have on the performance and long-term value creation. To help us achieve this, we use the agency theory, explaining the relationship between the agent, being the executive, and the principal, being the shareholder. We aim at determining whereas there is a un-balance in the power distribution, linked to a managerial power increase. Trough a case study about Bank of America, we study the protests around executive pay, before concluding and questioning ourselves about the economic sense of compensation packages.</p><p> </p><p> </p>

Thesis (Ph.D.)--University of Missouri-Columbia, 2006. / The entire dissertation/thesis text is included in the research.pdf file; the official abstract appears in the short.pdf file (which also appears in the research.pdf); a non-technical general description, or public abstract, appears in the public.pdf file. Title from title screen of research.pdf file viewed on (February 27, 2007) Vita. Includes bibliographical references.

In the middle of the financial turmoil, many managers are blamed by journalists or politicians to be responsible for the crisis. For unknown reasons, this crisis born elsewhere than in large quoted companies, has struck top executives and CEOs, accused by an angry public to benefit from excessive compensations. However this wave of protest has highlighted the field of executive compensation and sparked the academic debate regarding the determinants of executive pay, with a particular focus on the relation between pay and performance.   In this paper we discuss the role and attributes of executives, their remuneration schemes and the trend evolution in terms of package components and overall amounts. To delimit our study, we focus on the Anglo-American model only; the most criticized one, especially because of the important part covered by stock options. We conduct a theory review to provide a clear understanding of what executive compensation is and the impact it can have on the performance and long-term value creation. To help us achieve this, we use the agency theory, explaining the relationship between the agent, being the executive, and the principal, being the shareholder. We aim at determining whereas there is a un-balance in the power distribution, linked to a managerial power increase. Trough a case study about Bank of America, we study the protests around executive pay, before concluding and questioning ourselves about the economic sense of compensation packages.