Author: Amani Khaled BouresliPublisher:
ISBN:
Category :
Languages : en
Pages : 418
Book Description
Managerial Incentives and Firm Performance
Author: Amani Khaled BouresliPublisher:
ISBN:
Category :
Languages : en
Pages : 418
Book Description
Symposium on Managerial Incentives and Corporate Performance: Effects of Executive Compensation, Organzational Structure, Takeovers, and Government Policy
Author: Ray BallInvestment, Dividends, Firm Performance and Managerial Incentives
Author: Mahmoud AghaPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
We combine the incentive schemes offered to managers in practice into a single incentive package and construct a governance index to analyze the role of governance and the incentive package in addressing the agency costs of free cash flow. Using US based data, we find empirical evidence that managers in practice do not consume perks but make a tradeoff when they allocate the cash flows of the firm between investment and dividends. In general, managers in practice underinvest and overpay dividends; an increase in their incentive package would retract both investment and dividends toward the optimal levels; hence, firm performance would improve. We also find that governance is used as a control mechanism rather than as a substitute for the incentive package. Principals employ governance to slow down investment and increase dividends when there is a high informational asymmetry between the manager and the investors, and set these variables close to the optimal levels otherwise. Moreover, we find that firms in practice do not use dividends as a substitute for governance. Furthermore, we find monotone relations between investment, firm performance and dividends on the one hand, and governance and the incentive package on the other hand.
Firm Value and Managerial Incentives
Author: Michel HabibPublisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 60
Book Description
Managerial Incentives, Corporate Investment, and Economic Preference
Author: Francisco CovasPublisher:
ISBN:
Category : Decision making
Languages : en
Pages : 268
Book Description
Managerial Incentives and Corporate Performance
Author: Ray BallManagerial Incentives and Corporate Governance
Author: Musbau Kolawole KayodePublisher: GRIN Verlag
ISBN: 3668035822
Category : Business & Economics
Languages : en
Pages : 18
Book Description
Research Paper (undergraduate) from the year 2015 in the subject Business economics - Accounting and Taxes, grade: A, ( Atlantic International University ) (SCHOOL OF BUSINESS AND ECONOMICS), language: English, abstract: Corporate governance involves different checks and balances with the ability to influence the incentives and monitoring of a firm’s management. Sound corporate governance is predominantly essential when a firm’s management is different from its ownership. Randall (2009) argued that in the absence of appropriate corporate governance, managers who are separate from a company’s ownership may not be incentivized to work hard towards achieving shareholders’ goal of maximizing profits. Instead, non-owner managers might end up lavishly spending money and other resources in ways that directly benefits themselves, for example on perks, and living an expensive life. Surprisingly, some other managers may be tempted to spend firm’s money to accumulate personal wealth through frauds or theft.
Investment, Dividends, Firm Performance and Managerial Incentives
Author: Mahmoud AghaPublisher:
ISBN:
Category :
Languages : en
Pages : 41
Book Description
We develop a model, the quot;Tradeoff Modelquot;, to identify the nature of the agency costs of free cash flows in practice and the role of managerial incentives in mitigating these costs. Using US based data; we find empirical evidence that managers make a tradeoff when they allocate the cash flow of the firm between investment and dividends. Managers underinvest and overpay dividends when offered short-term incentives, like bonuses and vested stocks. Managers overinvest and underpay dividends when offered long-term incentives, like unvested stocks and options. An increase in these incentives would retract investment and dividends toward the optimal levels, thus firm performance would improve. Moreover, we find concave relations between investment and both bonus and option incentives, and corresponding convex relations between dividends and these two incentive schemes, confirming the tradeoff made by managers between investment and dividends. We also find concave relations between firm performance and all incentives, except option incentives where the relation is convex.
Managerial Incentives and the Choice Between Public and Bank Debt
Author: Costanza MeneghettiPublisher:
ISBN:
Category : Corporate debt
Languages : en
Pages :
Book Description
This paper proposes that managerial incentive compensation affects the firm choice between public and bank debt. To motivate the case I analyze a simple model with complete and perfect information that implies a positive relation between managers' incentive compensation and preference toward bank debt. Using firm-level data over the period 1992-2005, I empirically examine the relation between managerial incentives and financing decisions. Specifically, I examine whether managers whose compensation is tied to firm performance choose bank over public debt as a commitment mechanism to reduce the cost of debt. Consistent with a monitoring role of banks, I find that the probability of choosing bank over public debt is positively related to the level of incentive compensation. Further, I find that public lenders price the incentive alignment between manager and shareholders by increasing the cost of debt, while the overall cost of bank loan does not depend on the manager's incentive compensation. Finally, I find that banks are more likely to include a collateral provision in the debt contract if the manager's compensation is tied to firm performance.
Author: