What’s Wrong with Executive Compensation?

Nongovernmental organizations (NGOs) comprise the sector of society that attempts to hold business and other institutions accountable for their social responsibility. Yet NGOs rarely have established governance mechanisms whereby their members and supporters can hold them accountable for their activities. In contrast, other major actors in the society – notably governments, corporations, and unions – maintain long established albeit imperfect instruments of governance and responsibility. This article presents a variety of ways in which NGOs could voluntarily strengthen their internal governance and thus become more accountable to their members and supporters as well as society at large. In the process, these important civil society organizations would enhance their effectiveness in achieving improvements in key areas of public policy.     

What’s Wrong with Executive Compensation?

I broadly explore the question by examining several common criticisms of CEO pay through both philosophical and empirical lenses. While some criticisms appear to be unfounded, the analysis shows not only that current compensation practices are problematic both from the standpoint of distributive justice and fairness, but also that incentive pay ultimately exacerbates the very agency problem it is purported to solve.     

Perceived Acceptability of Organizational Layoffs and Job Alliances During a Recession: A Mapping of Portuguese People’s Views

The present study aimed to explore and map the views of Portuguese laypersons regarding the acceptability of downsizing and restructuring measures during a recession. Two hundred and seven participants with various levels of training in economics were presented with a number of realistic scenarios depicting various measures, and were asked to indicate the extent to which they considered them to be acceptable. The scenarios were created by varying three factors likely to have an impact on people’s views: the magnitude of a company’s reduction in net sales, the magnitude of planned downsizing, and the way in which downsizing would be implemented, either through layoffs, job alliances or both. Six qualitatively different personal positions were found. Four of these following positions were expected: (1) never acceptable (15 %), (2) mainly depends on the magnitude of downsizing (22 %), (3) mainly acceptable (17 %) and (4) job alliance (8 %). Two unexpected positions were also observed: (5) drastic measures (8 %) and (6) undetermined (29 %).     

Perceived Legitimacy of Executives Bonuses in Time of Global Crisis: A Mapping of Portuguese People’s Views

The present study aimed to explore and map the views of Portuguese laypersons regarding the legitimacy of bonuses for senior executives. Two hundred eight participants, with various levels of training in economics, were presented with a number of concrete scenarios depicting the circumstances in which senior executives have received bonuses of variable amounts, and they were asked to indicate the extent to which such bonuses may be considered as legitimate. The scenarios were created by varying four factors likely to have an impact on people’s views: (a) the extent to which the objectives fixed by the company have been met or not, (b) the global economic context in which the company has performed, (c) the availability of experienced senior executives in the sector under consideration, and (d) the amount of money that has been awarded, in terms of both the euros and multiples of the average worker’s pay. Five qualitatively different personal positions were found. The most common positions were that executive bonuses were either never legitimate (30 %) or not very legitimate (25 %). People without any background in economics were more likely to hold these views than people with a background in economics. The remaining 45 % of the participants supported the awarding of bonus, but their support was conditional, and the main condition was the extent to which the company’s objectives were met. Thus for most participants, the practice of awarding extra pay to senior executives was either (a) never legitimate, or (b) legitimate only when the company’s objectives have been attained, or (c) legitimate only when, even in a time of economic crisis, the company’s objectives have been surpassed.     

The Effects of Compensation Structures and Monetary Rewards on Managers’ Decisions to Blow the Whistle

Recent research indicates that compensation structure can be used by firms to discourage their employees from whistleblowing. We extend the ethics literature by examining how compensation structures and financial rewards work together to influence managers’ decisions to blow the whistle. Results from an experiment indicate that compensation with restricted stock, relative to stock payments that lack restrictions, can enhance the likelihood that managers will blow the whistle when large rewards are available. However, restricted stock can also threaten the effectiveness of whistleblowing systems without the presence of large financial rewards for whistleblowing. Thus, the large potential rewards for whistleblowing enacted by the Dodd–Frank Act appear timely as firms are moving toward compensation agreements that include greater proportions of restricted stock.     

Vice or Virtue? The Impact of Corporate Social Responsibility on Executive Compensation

We empirically examine the impact of corporate social responsibility (CSR) on CEO compensation using a large sample of the US firms from 1996 to 2010. We develop and test two hypotheses, the overinvestment hypothesis based on agency theory and the conflict–resolution hypothesis based on stakeholder theory. We find that the lag of CSR adversely affects both total compensation and cash compensation, after controlling for various firm and board characteristics. Our estimates show that an interquartile increase in CSR is followed by a 4.35% (2.78%) decrease in total (cash) compensation. We also find an inverse association between lagged employee relations and CEO compensation. Our results are robust to the correction for endogeneity using instrumental variable approach. Taken together, our results support the conflict–resolution hypothesis, but not the CSR overinvestment argument.     

From ‘free’ to fee: Acceptability of airline ancillary fees and the effects on customer behavior

Businesses in various consumer service industries have begun to unbundle their service offerings by introducing numerous fees for products and services that were previously provided as “free.” Anecdotal evidence in the media indicates that these fees cause widespread public displeasure, frustration, and outrage. This paper develops a framework of fee acceptability, negative emotions, and dysfunctional customer behavior, which is tested using data from the airline industry. Findings identify the strongest effects on betrayal in the case of baggage fees, followed by charges for comfort. Also, betrayal has a direct effect on complaining, whereas anger mediates the relationship between betrayal and negative word of mouth.     

Tax Policies and the “Going-out” Strategy

In recent years,with the rapid development of China＇s economy,more and more Chinese enterprises have actively begun to participate in international competition,and exerted such tremendous influence that they are playing an increasingly significant role in international trade and cooperation. But since the outbreak of the financial crisis in 2007,the road for Chinese domestic     

Who is the Athlete Endorser? A Cross-Cultural Exploration of Advertising Practitioners’ Views

ABSTRACT

This study, via the use of focus groups, explores the common meanings that advertising practitioners in 10 countries associate with athlete endorsers. The study's macro perspective brings a unique understanding of practitioners’ universal thinking and practices in relation to athlete endorsement. It reveals that practitioners across the world correlate athlete endorsers with a wide range of positive and useful psychological, social, physical, skillfulness, and sport meanings. In particular, authenticity, objective performance, and the athletes’ belonging to the realm of sport—considered by practitioners as a carrier of positive meanings and as a “meeting place” between audiences and endorsers—were identified as greatly contributing to athletes’ positive endorsement value. The article places the various universal dimensions of athletes raised by practitioners in a holistic conceptual profile, in order to help visualize and organize thoughts when selecting athlete endorsers for marketing campaigns.     

Consumers’ Response When Regulators Are Uncertain About the Source of Foodborne Illness

Health and safety officials are sometimes placed in an awkward position: knowing that a foodborne disease outbreak is occurring but not knowing which food is responsible. They have to advise consumers, but relying on ambiguous and evolving information raises the question, how do consumers respond to changing advice? Here, we estimate a model of the retail demand for tomatoes in the USA, accounting for the 2008 events in the USA in which consumers were advised that some types of tomatoes were contaminated with Salmonella bacteria, and later were advised that tomatoes were safe and peppers were not. Using the quantity of news media attention given to the Salmonella issue, we show that consumers generally responded to the advice that tomatoes were contaminated, but did not respond to the declaration that tomatoes were safe. The magnitude of response to contemporaneous news depended on the extent of coverage in previous weeks.     

‘Murketing’ and the rhetoric of the new sincerity

ABSTRACT

This paper argues that marketing scholars should be paying a lot more attention to the rhetorical form which the economic historian Philip Mirowski – following the novelist David Foster Wallace – calls murketing. Combining philosophical, historical, economic and fictional resources, the paper first produces a synthetic account of what murketing is. Blurring calculated dishonesty with impassioned sincerity, murketing operationalises a double-truth dialectic which treats consumers as both subjects and objects within the process of their own persuasion. In order to indicate how murketing works, the paper then considers recent examples from murketing practice where allusions are made which are both cynical and gnostic, both conceited and intimate, and both earnest and ironic. The paper closes by indicating how its account of the theory and practice of murketing might inform the future study, consumption and regulation of advertising and marketing communications.     

Compensation of Economists—Measuring the Market Value of NABE Member Characteristics

This study is based on the 2008 NABE salary survey and provides detail on the estimated relationship between the total compensation and the professional characteristics of NABE members who responded to the survey. This study builds on previous work done by Peter Jaquette in analyzing the 2006 salary survey data. We find many similarities to the 2006 results, but also find interesting exceptions in the 2008 sample that suggest further inquiry in subsequent survey analysis.     

Strategic Trade Policies Under Monopsony and Uncertainty: The Exporter’s Non-Linear Responses Based on the Organization of Its Industry

Players’ access to information, their market power, and the timing and rationale of their decisions are important but often neglected in the making of strategic trade policies. I examine optimal decisions in a monopsonistic market with asymmetric information to determine an exporting country’s policy strategies. The large importing country first sets a producer subsidy and later imposes an import tariff after learning about the welfare-maximizing exporter’s reactions to the subsidy. I assume that at the time of their decisions, the n exporting firms have incomplete information and rely only on noisy signals from their own domestic market to account for the uncertainty in the international market. I find that import tariff and producer subsidy can be substitute rather than exclusively independent policies. Results also show that the exporting country’s optimal reaction is non-linear and is based on the structure of its export industry; the exporting country’s government facing a large importer subsidizes (or taxes) its export when the number of exporting firms is low (or high) relative to a threshold number of firms. More important, before giving out subsidies, the exporting country’s government requires more collusion of its firms especially when the large importer targets a fixed domestic price.     

Optimistic About the Chinese Market in the Second Half of the Year

The Chinese domestic market willmaintain steady growth in thesecond half of the year, accordingto official analysis, and the retail sales ofthe social consumer goods of the year willgrow by 9.5 percent, and 9 percent overthe same period of year. In one of its rides, the EconomicDaily anticipated that the sales volume ofcapital goods in the second half of the yearwill grow by 30 percent over the sameperiod of last year, while the import andexport growth of foreign trade will bearound 20 percent…     

Emotional and the normative aspects of customers’ reviews

The goal of the current research is to investigate the link between the emotional aspects of hotel and travel organization customers' reviews and their normative (e.g., star rating) rankings. After filtering, the Yelp dataset generated 3,47,803 hotel and travel company reviews. Following the purification of user reviews, we used an unsupervised machine learning technique-based NRC Emotion Lexicon to study the relationships between various emotional aspects of reviews and their normative values (e.g., star rating) for the review. Customers express different sorts of feelings for different types of emotional aspects, forcing them to assign different stars, according to the study's findings. The study is the first to use a lexicon-based unsupervised learning approach to look into the emotional aspects of hotel and travel organization reviews and associated normative (e.g., star rating) rankings.     

Mill's ‘proof’ of Utility and the composition of causes

John Stuart Mill proposed that all policy precepts, be they in the areas of morality or prudence or aesthetics, are all subordinate to the precepts of the Art of Life. The value which he assumes in defining the Art of Life is the Principle of Utility. This principle, being normative rather than fact, can admit of no proof based solely on deductive inference. Yet Mill proposed considerations that he believed capable of rationally persuading one to accept his principle as the basic principle for the Art of Life. This paper aims to evaluate this argument. In particular, it tries to show that a crucial step, often thought to be a logical howler, is not to be so simply dismissed. It is shown that if one accepts certain theses from Mill's philosophy of science and of social science, concerning the composition of causes, then the crucial step is fully justified. It is also suggested that these theses of Mill's philosophy of science are mistaken. So Mill's proof of utility is, after all, unsound, but the reconstruction proposed shows it to be much more plausible and much more philosophically interesting than is often thought.     

Workers’ Deviant Behavior in the Business Outfit of a Nigerian University: Situating Policies with Empirics

ABSTRACT

Using detailed micro data that measures the deviant behaviors of workers in the business outfit of a Nigerian university, the extent to which these behaviors were influenced by some specific instruments that informs the policy stance of the management of the business outfit, was examined in this paper. The logistic regression technique was applied in testing the empirical model that was informed by the Trevino (1986) “interactionist” model. The results present some policy-relevant outcomes and are robust when considering alternative approaches to the estimations.     

Regulation and the Promotion of Audit Ethics: Analysis of the Content of the EU’s Policy

Accounting literature has commonly judged the impact of regulation on auditors’ ethical commitment by studying daily audit practice. We argue that the content of the regulations themselves is an important determinant of such an impact. This paper evaluates the capacity of the content of regulation to promote audit ethics by reference to the European Union’s (EU) audit policy. Anchored in the extant conceptual perspectives on ethics, our analysis of relevant policy documents shows that the EU’s approach to audit ethics relates most strongly to the deontological perspectives on ethics and leaves largely unexplored other means of promoting auditors’ ethical stance, such as by stimulating virtue ethics. We find that it is the EU regulators’ restricted view of the conceptual foundations of audit ethics that limits the capacity of their policy to effectively stimulate auditors’ ethical commitment. The paper also discusses the potential implications of our analysis for the design of future audit policy.     

Key Events of KLM in 2003 About the Kingdom of Netherlands

■1.China Southern and KLM announced joint cargo services:to start October 15,2003■2.KLM adds codeshare destinations with China Southern Airlines■3.KLM makes its 84th year with a new Deletware House