 |
|
Reducing CEOs' option-based compensation decreases risky investments
October 23, 2008MU researcher finds that firms decrease CEOs' option-based compensation after restatements
COLUMBIA, Mo. - Since the recent bailout on Wall Street, the public has started to heavily scrutinize firms' large executive pay packages. This week, John White, director of the Securities and Exchange Commission's Division of Corporation Finance, urged all U.S. companies to consider limiting compensation packages that reward excessive risk-taking by executives. A recent University of Missouri study provides evidence that decreasing stock option-based compensation of chief executive officers (CEOs) after companies' earnings restatements results in a decrease of risky investments and improved profitability.
In the study, Farber analyzed 289 firms that had earning restatements from 1997 to 2001. An earning restatement occurs when companies revise their earnings from what they previously reported, because of accounting irregularities or errors. Farber found that compared to other firms, firms that restated earnings were more likely to re-contract with their CEOs after the restatement and reduce the proportion of CEOs' total compensation that was stock option-based. After this reduction, the firms experienced a decrease in risky investments and improved operating performance, resulting in a better bottom line.
"It's easy for the well-intended CEO who has too many stock options to take risky investments," Farber said. "The research results strongly support that a decrease in option-based compensation reduces CEOs' incentives to take excessively risky investments, resulting in improved profitability."
University of Missouri-Columbia
Compensation Current Events and Compensation News RSSTherapy 32 times more cost effective at increasing happiness than money
Research by the University of Warwick and the University of Manchester finds that psychological therapy could be 32 times more cost effective at making you happy than simply obtaining more money.
New Water Management Tool May Help Ease Effects of Drought
Continued improvement of climate forecasts is resulting in better information about what rainfall and streamflow may look like months in advance.
New theory on fairness in economics targets CEO pay
Chief executives in 35 of the top Fortune 500 companies were overpaid by about 129 times their "ideal salaries" in 2008, according to a new type of theoretical analysis proposed by a Purdue University researcher to determine fair CEO compensation.
Medical ethics experts identify, address key issues in H1N1 pandemic
The anticipated onset of a second wave of the H1N1 influenza pandemic could present a host of thorny medical ethics issues best considered well in advance, according to the University of Toronto Joint Centre for Bioethics, which today released nine papers for public discussion.
New computer models aim to classify, help reduce injury accidents
Researchers are developing computer models to comb through thousands of injury reports in large administrative medical datasets or insurance claims data to automatically classify them based on specific words or phrases.
Bioavailable contaminants come from the Exxon Valdez oil catastrophe
Contaminants from natural coal deposits in the Gulf of Alaska are not easily bioavailable, unlike the crude oil from the Exxon Valdez tanker catastrophe.
Do promises matter to employees? Not as much as we once thought, study finds
Years of research suggest that the promises organizations make to employees matter in establishing and maintaining a "psychological contract" between the two parties.
New studies give clear guidance on how to better recruit volunteers for Alzheimer's clinical studies
Partnering with local physicians, working with local clinics, and conducting educational seminars and health fairs were found to be the most effective tools in recruiting people for Alzheimer's clinical studies.
Elderly breast cancer patients receive chemotherapy if treated in private practices
In a study to determine the non-medical factors that may be associated with the decision to treat nonmetastatic breast cancer.
Female human embryos adjust the balance of X chromosomes before implantation
Dutch researchers have found the first evidence that a process of inactivating the X chromosome during embryo development and implantation, which was known to occur in mice but unknown in humans, does, in fact, take place in human female embryos prior to implantation in the womb.
More Compensation Current Events and Compensation News Articles
 |
Compensation by George Milkovich (Author), Jerry Newman (Author) As the market-leading text in its course area, COMPENSATION, 9th Edition by Milkovich and Newman offers current research material, in-depth discussion of topics, integration of Internet coverage, excellent pedagogy, and a truly engaging writing style. The 9th edition continues to examine the strategic choices in managing total compensation. The total compensation model introduced in chapter one serves as an integrating framework throughout the book. The authors discuss major compensation issues in the context of current theory, research, and real-business practices. Milkovich and Newman strive to differentiate beliefs and opinions from facts and scholarly research. They illustrate new developments in compensation practices as well as established approaches to compensation decisions. |
 |
The Compensation Handbook by Lance Berger (Author), Dorothy Berger (Author) The Perennial Favorite of HR Professionals Seeking the Most Current, Insightful Reference in the Field For over thirty-five years, human resources and management professionals have been turning to a single source for the most astute and up-to-date commentary about the state of the industry-The Compensation Handbook. Composed of one-hundred percent brand-new material from more than sixty authorities in the field, this fully updated edition provides direct insight into the most critical issues compensation and human resources professionals face today. Among the many human-capital topics covered are new reward strategies for attracting and retaining highly qualified employees from America's fast-draining talent pool; addressing the mass retirement of baby... |
 |
Solving the Compensation Puzzle: Putting Together a Complete Pay and Performance System (Practical Hr Series) by Sharon K. Koss SPHR CCP (Author) Whether creating a new system or filling in the gaps in an established business, this resource acts as a practical tool for dealing with compensation in the workplace. Linking pay and performance, this guidebook demonstrates how to improve a salary administration program and includes facts sheets, templates, and sample forms that can be customized to meet each organization's unique requirements. |
 |
Compensation by George Milkovich (Author), Jerry Newman (Author) COMPENSATION, 8th Edition, by Milkovich and Newman is the market-leading text in this course area. It offers instructor's current research material, in depth discussion of topics, integration of Internet coverage, excellent pedagogy, and a truly engaging writing style. George Milkovich and Jerry Newman are leading authorities in the field of Human Resource Management and Compensation. They consult with leading businesses, have won teaching awards, publish in the leading journals. Milkovich received a career contribution award from WorldatWork (formerly American Compensation Association) in 2000. COMPENSATION, 8th Edition, examines the strategic choices in managing total compensation. The total compensation model introduced in chapter one serves as an integrating framework throughout... |
 |
The WorldatWork Handbook of Compensation, Benefits & Total Rewards: A Comprehensive Guide for HR Professionals by WorldatWork (Author) Praise for The WorldatWork Handbook of Compensation, Benefits & Total Rewards This is the definitive guide to compensation and benefits for modern HR professionals who must attract, motivate, and retain quality employees. Technical enough for specialists but broad in scope for generalists, this well-rounded resource belongs on the desk of every recruiter and HR executive. An indispensable tool for understanding and implementing the total rewards concept, the WorldatWork Handbook of Compensation, Benefits, and Total Rewards is the key to designing compensation practices that ensure organizational success. Coverage includes: Why the total rewards strategy works Developing the components of a total rewards program Common ways a total rewards program... |
 |
Harvard Business Review on Compensation by Alfred Rappport (Author), Alfie Kohn (Author), Egon Zehnder (Author), Jeffrey Pfeffer (Author), Nicoson Robert D. (Author) The Harvard Business Review Paperback Series is designed to bring today's managers and professionals the fundamental information they need to stay competitive in a fast-moving world. From the preeminent thinkers whose work has defined an entire field to the rising stars who will redefine the way we think about business, here are the leading minds and landmark ideas that have established the Harvard Business Review as required reading for ambitious businesspeople in organizations around the globe. This collection will help managers and human resource professionals weigh the pros and cons of different compensation plans and provide a framework for thinking about this important aspect of the war for talent. The articles discuss a variety of compensation-related issues such as: making... |
 |
Compensation by George T. Milkovich (Author) As the market-leading text in its course area, "Compensation, 9th Edition" by Milkovich and Newman offers current research material, in-depth discussion of topics, integration of Internet coverage, excellent pedagogy, and a truly engaging writing style. The 9th edition continues to examine the strategic choices in managing total compensation. The total compensation model introduced in chapter one serves as an integrating framework throughout the book. The authors discuss major compensation issues in the context of current theory, research, and real-business practices. Milkovich and Newman strive to differentiate beliefs and opinions from facts and scholarly research. They illustrate new developments in compensation practices as well as established approaches to compensation decisions. |
 |
Strategic Compensation (6th Edition) by Joe Martocchio (Author) This book is well suited to a variety of students, including undergraduate and master’s degree students studying compensation. Martocchio provides a framework for understanding strategic compensation that can be used by all business professionals and business majors. |
 |
Paying for Performance: A Guide to Compensation Management, 2nd Edition by Peter T. Chingos (Author) An up-to-date, revised edition of the complete, practical guide to designing and implementing effective compensation plans A compensation package should be more than just the means to attract and retain talented executives. The right kind of plan can give your company a powerful strategic advantage. In Paying for Performance, Second Edition, consultants at Mercer Human Resource Consulting, Inc., one of the world’s leading human resources consulting firms, give you the tools and techniques you need to design and implement a highly effective compensation program that will sharpen your company’s competitive edge for years to come. The book also shows you how to understand shareholder expectations, government regulation, and a host of business and human resources issues.... |
 |
The Complete Guide to Executive Compensation by Bruce Ellig (Author) ANSWERS TO EXCESSIVE EXECUTIVE PAY Charges of excessive executive compensation have filled the business press for a number of years, yet few understand why pay plans trigger such results.This desktop reference book is an easy-to-access, invaluable guide to structuring appropriate executive pay plans. Properly used, it will help avoid excessive executive pay resulting from poorly designed plans. Written by renowned compensation expert Bruce Ellig, this book is a must read for the designers, approvers, and recipients of executive compensation, as well as those who write about the subject. Consultants and in-house pay designers will find detailed examples (supplemented with over 400 figures and tables) to trigger their own creativity. Compensation committees... |
| © 2009 BrightSurf.com |