EXECUTIVE COMPENSATION STRUCTURE AND CORPORATE GOVERNANCE CHOICES

Using data that reflect the significant growth in incentive compensation during the last decade, we extend research in this area by specifying a more complete model that addresses both corporate governance and risk‐sharing factors that theory suggests should influence compensation policy. We find that the extent of incentive compensation is systematically related to other features of corporate governance, as well as to factors affecting managerial risk aversion. The results support the following conclusions: (a) the presence of outside directors and blockholders facilitates the use of incentive compensation, (b) incentive compensation is inversely related to use of leverage, and (c) the incentive pay component of compensation is lower for CEOs near or at retirement age and is decreasing in the percentage of firm stock already owned by the CEO. JEL classification: G34     

ACCOUNTING FOR SEIGNIORAGE

This paper examines anomalies in the accounting procedures for the treatment of seigniorage on the Australian note and coin issue. It explains how the substitution of coins for notes leads to the unexpected result of reducing the budget deficit     

ACCOUNTING FOR INSECURITY

This paper argues that modern systems of budgetary control are implicated in the exploitation and production of insecure forms of employment. The flexibility of direct labour is assumed at a very basic level in some of the core techniques of costing and budgetary control. Previous historical studies of the development of these forms of control, moreover, have shown that they were used to shift the costs of economic fluctuation from capital to labour as well as to encourage the efficient utilisation of human effort. In the light of these observations, it is to be expected that the use of budgetary targets which incorporate direct labour costs will: (1) be more prevalent where the workers are least able to resist the various forms of “flexibility”; and (2) encourage recourse to redundancies where the performance of business units within a company falls below expectation. The paper then tests these hypotheses against data from a recent survey of industrial relations practice in large UK companies. The results show, firstly, that there is a strong and positive association between the proportions of females and part-timers within the workforce and the use of unit labour costs and the direct labour cost/sales ratio as performance targets. Secondly, the use of return-on-investment (R.O.I.) targets is associated with the declaration of redundancies in business units which have failed to perform satisfactorily. For those to whom insecurity of employment constitutes a social problem rather than a managerial convenience to be celebrated as “flexibility”, these findings indicate that the accounting control systems typical of the modern company constitute part of the problem. The achievement of the long-standing trade union aim of security of income and employment will depend, in part, on changing these systems of control.     

COMPENSATION CONTRACTS OF CHIEF EXECUTIVE OFFICERS: DETERMINANTS OF PAY-PERFORMANCE SENSITIVITY

Compensation contracts of chief executive officers of large firms typically provide for a low linkage between compensation and stock performance. We test predictions of various theoretical models of managerial behavior using pay-performance sensitivity measures. We find that even though the sensitivity measures are low on average, they vary cross-sectionally, in a manner broadly consistent with predictions from the literature on efficient contracting.     

GOLF TOURNAMENTS AND CEO PAY—UNRAVELING THE MYSTERIES OF EXECUTIVE COMPENSATION

Leading financial economists and activist institutional investors have long argued that the proper alignment of manager and shareholder interests requires the use of performance based compensation. Partly in response to these pressures, and in combination with a change in the tax code that encourages performance-based pay, corporate boards have dramatically increased their use of stock grants and executive stock options. Combine this development with the longest bull market in U.S. financial history, and the result is unprecedented levels of CEO pay at the close of the 20th century. This review of executive compensation reveals that the economic theory of tournaments may provide a rationale for the pattern, if not the level, of executive pay. Specifically it finds that the total compensation of the five highestpaid executives in a cross-section of new and old-economy firms is very similar to the pattern of payouts to players in a golf tournament. The author also reports that recent studies show a significant increase in the pay-for-performance correlation throughout the 1990s. But whether that correlation is as high as it should be, and whether current levels of CEO pay are socially "optimal," are questions that remain unanswered.     

新企业会计准则系列——投资项目的分析方法一

近年来，一些上市公司利用长期投资进行资产交易获得高额投资收益仿佛已经成了习惯。一些不稳定的投资收益实际上是公司业绩的地雷，或许能支撑起公司暂时的繁荣，但却掩盖了公司经营与治理结构存在的问题，由此避免不了公司因投资收益剧减而业绩大滑坡的风险。因此，银行债权人应意识到，会计报表中的投资收益如果没有真实的业绩作背景，单凭利润表中的净利润说明不了任何问题。所以，本期我们将结合投资项目在会计报表中的披露，掌握投资项目对企业财务的影响。     

ACCOUNTING FOR EMPLOYEE ENTITLEMENTS*

This paper considers the problem of accounting for employee entitlements. Accrued entitlements to annual leave, sick leave and long service leave are evaluated by reference to the basic characteristics of an accounting liability and a case is presented for liability recognition in each instance. An empirical survey undertaken by the authors shows current practice in this area and indicates the need for improved financial reporting.     

ACCOUNTING FOR THE SEVERN BRIDGE

Although the Severn bridge has been financed as a vote-funded service, the Severn Bridge Tolls Act 1965 required the publication of commercial-style 'White Paper accounts'. The existence of this consistent source makes it possible to review the financial history to date of the Severn bridge, an interesting example of a case of government deciding that a capital-intensive infrastructural facility should break-even over its life. Two principal factors explain the everaccumulating deficiencies on the bridge account: the failure of successive governments to maintain the bridge toll in real terms; and the exceptional capital repairs required during the 1980s because of design faults and greater than expected loads. There are implications for the design of reporting systems for civil-service executive agencies and for the privatized 'concession'-style financing packages for transport infrastructure which the present Government has now adopted.     

新企业会计准则系列——新企业会计准则下的会计报表构成（一）

会计准则是规范企业会计确认、计量和报告行为,保证会计信息质量的会计法规,是会计人员在进行业务处职时的法律依据。     

VALUING AND ACCOUNTING FOR LOAN GUARANTEES

To achieve certain policy objectives, governments frequentlyprovide private borrowers with loan guarantees that cover someor all of the risk that the borrower will be unable to repaythe loan. Such guarantees are extremely valuable, and theirvalue increases with the riskiness of the underlying asset orcredit, the size of the investment, and the duration of theloan. The flip side of a guarantee's value to a lender is itscost to the government. Such a cost is not explicit but is realnevertheless. When providing guarantees, governments thereforemust establish accounting, valuation, and risk-sharing mechanisms.This article describes methods of valuing guarantees; reportsestimates of the value of guarantees in different settings;and summarizes new methods of accounting designed to anticipatelosses, create reserves, and channel funds through transparentaccounts to ensure that the costs of guarantees are evidentto government decisionmakers.