Securitization of corporate assets and executive compensation

We examine the effect of corporate asset-backed securitization on managerial compensation. We find that CEO compensation increases after securitization of corporate assets, which is consistent with two distinct theoretical views: (1) asset-backed securitization improves the efficiency of performance-based compensation as corporate performance becomes a better signal of managerial effort and (2) securitization of corporate assets mitigates liquidity constraints so that firms can make more efficient investments. We find that securitization primarily affects short-term accounting components (bonuses) and less equity-based components of the CEO's performance-based compensation. Further investigation reveals support for the second view of liquidity but not the first view of moral hazard. The results are robust to controlling for both possible self-selection biases associated with the decision to rely on asset-backed securitization as a means of external financing and simultaneity between executive compensation and financial decisions (securitization and leverage).     

Business strategy,executive compensation and firm performance

We investigate the impact of business strategy on the use of performance‐linked compensation (PLC) and long‐term incentive plans. We also examine the relation between strategy and compensation structure fit and performance. Using cluster and content analyses to classify a firm’s business strategy, we predict and find that product differentiation firms use a higher proportion of PLCs than cost‐leadership firms. Furthermore, we find that the misfit between business strategy and compensation structure has a negative impact on performance. This study contributes to the executive compensation literature by recognizing that business strategy influences the compensation structure and that a strategy and compensation structure misfit negatively affects performance.     

The impact of firm prestige on executive compensation

We show that chief executive officers (CEOs) of prestigious firms earn less. Total compensation is on average 8% lower for firms listed in Fortune’s ranking of America’s most admired companies. We suggest that CEOs are willing to trade off status and career benefits from working for a publicly admired company against additional monetary compensation. Our identification strategy is based on matched sample analyses, difference-in-differences regressions, and a regression discontinuity design. We perform several robustness checks and exclude many alternative explanations, including that firm prestige just proxies for better corporate governance or for increased exposure of the pay-setting process to media attention.     

Corporate governance,top executive compensation and firm performance in Japan

For 174 large Japanese corporations during 1992–1996, we find that top executive pay is higher in firms with weaker corporate governance mechanisms, controlling for standard economic determinants of pay. We use management ownership and family control (“the ownership mechanisms”), and keiretsu affiliation, the presence of outside directors, and board size (“the monitoring mechanisms”) to measure corporate governance mechanisms. We also find that the excess pay related to ownership and monitoring variables is negatively associated with subsequent accounting performance, consistent with the presence of an agency problem. We do not, however, find an association between this excess pay and subsequent stock returns.     

Predictive versus opportunistic earnings management,executive compensation,and firm performance

We examine the association between earnings management and an important component of corporate governance, the incentives provided through compensation. We argue that firms with predictive (opportunistic) earnings management, in which discretionary accruals do (do not) relate to future cash flows, provide a more (less) ideal setting for the use of compensation as incentives. Our empirical tests show that CEO compensation levels (measured by salary, bonus, and other forms of compensation) are positively related to predictive earnings management and negatively related to opportunistic earnings management. We also find that predictive earnings management is positively associated with future returns, whereas opportunistic earnings management is negatively associated with future returns. Overall, our results suggest that firms provide more incentives if their earnings are also more informative because of discretionary accruals.     

Integrating corporate social responsibility criteria into executive compensation and firm innovation: International evidence

Using a large sample of firms from 30 countries, we find that the integration of corporate social responsibility (CSR) criteria into executive compensation is associated with greater innovation output in countries around the world. We also find that this positive association is stronger in countries with weak stakeholder orientation, countries with weak legal environments, and countries without mandatory CSR reporting requirements. These findings suggest that CSR contracting can compensate for institutional voids and high stakeholder demand for CSR, and thereby foster firm innovation. The results of the channel analyses suggest that a greater level of employee innovation productivity, enhanced managerial risk-taking, and greater responsiveness of firms' R&D investment to their investment opportunities play a significant role in the association between CSR contracting and innovation. Overall, our study demonstrates in a global context the importance of linking executive compensation to nonfinancial criteria in addition to financial criteria, and it documents the heterogeneity in the effect of CSR contracting on firm innovation in different countries.     

Accounting diversity and firm valuation

We examine accounting numbers and stock prices across three countries: Germany, Norway, and the United Kingdom (UK). The accounting systems in the three countries differ in faithfulness to clean surplus accounting and in conservatism. We address three questions. First, are there systematic differences across countries in the value relevance of accounting? Second, are there systematic differences in the incremental and relative value relevance of book values and earnings per shape (EPS) across the countries? Third, do future earnings realizations (proxies for expected earnings) explain current stock prices? We find that accounting book value and EPS are significantly related to current stock prices across all three countries. German accounting numbers have the lowest relation with stock prices (R² ≈ 40%) and UK accounting numbers the highest (R² ≈ 70%), while Norwegian accounting numbers are in between (R² ≈ 60%). Second, the incremental and relative explanatory power of book value and of EPS differs across time and across countries. Book values explain more than earnings in Germany and Norway, but less in the UK. Finally, future income realization explain little about market prices not already explained by current book value and EPS.     

Comments on the valuation of derivative assets

This paper presents an alternative approach to derive the Breeden-Litzenberger valuation formula, which expresses the price of an arbitrary derivative security in terms of call options' prices. This valuation formula follows from the observation that a continuous derivative security can be replicated by a portfolio including a bond and call options with all possible exercise prices. Discrete terms are added to the original Breeden-Litzenberger formula to reflect possible discontinuities of the call option price's derivative with respect to the exercise price. These discontinuities are subsequently shown to correspond to mass points of the probability distribution of the stock price. Several applications of the Breeden-Litzenberger valuation formula are demonstrated.     

Real activities manipulation and firm valuation

In this paper, we study the link between real earnings management and firm value. Consistent with prior studies, we expect the ability of a firm to generate future cash flows to be significantly impaired by its use of real activities manipulations. Using a cross-section of companies from the Standard & Poor’s Compustat database from 1990 to 2013, we find that firms with higher real earnings management are associated with lower industry-adjusted Tobin’s Q and firm-specific misvaluation measure. Our results are consistent under several regression techniques addressing potential endogeneity issues and alternative proxies for real earnings management after controlling for known factors to affect firm market values.     

Options trading activity and firm valuation

Options may have an effect on firm value because they help complete markets and stimulate informed trades. However, these benefits are likely to manifest themselves in active, rather than inactive, options markets. Supporting this observation, we find that firms with more options trading have higher values of Tobin's q, after accounting for other determinants of value. Corporate investment in firms with greater options trading is more sensitive to stock prices. Options trading affects firm valuation more strongly in stocks with greater information asymmetry. These results indicate that options trading is positively associated with firm values as well as information production.     

First offshore bond issuances and firm valuation

Does the first offshore bond initial public offering (BIPO) affect firm valuation? By using a sample of US firms we document the dynamics of the firm valuation in response to initial offshore bond issuance. We find that offshore BIPOs have a positive short-term effect on US firms' valuations. The effect varies in firm characteristics, timing, and the location of the issue. Positive valuation effect is further confirmed by using difference-in-differences analysis approach, where offshore bond issuers are compared with their domestic counterparts. Additionally, firms with a strong need for external funds and growth prospects accelerate their offshore public debt market entry.     

客户资源无形资产及其评估方法

在市场中,客户相伴生产者和供应商而生。在作为生产者和供应商的企业被转让时,相应的客户资源也将跟随转移。如何评估客户资源的价值,企业转让中的交易双方对此都十分关注。本文拟就此阐述个人的一些见解。     

The power of the pen and executive compensation

We examine the press’ role in monitoring and influencing executive compensation practice using more than 11,000 press articles about CEO compensation from 1994 to 2002. Negative press coverage is more strongly related to excess annual pay than to raw annual pay, suggesting a sophisticated approach by the media in selecting CEOs to cover. However, negative coverage is also greater for CEOs with more option exercises, suggesting the press engages in some degree of “sensationalism.” We find little evidence that firms respond to negative press coverage by decreasing excess CEO compensation or increasing CEO turnover.     

城市品牌资产的开发、评估及维护

城市品牌资产的评估及维护是城市品牌理论的重要内容。本文从城市品牌资产的界定和顾客资产导向下的城市品牌核心价值开发入手,推导出城市品牌资产维护的重要性,并指出应该从政府、行业协会及企业三个层面对城市品牌资产进行维护。希望能对城市品牌资产的开发、评估和维护等方面的研究有所启发。     

Cost behavior and executive bonus compensation

Prior literature provides compelling evidence of an asymmetric relation between executive bonus compensation and earnings performance. In particular, this literature reports that compensation committees assign greater weight to good (positive) earnings performance than poor (negative) earnings performance. Taken together, the prior literature provides strong support for critics who claim that compensation committees blindly protect executives from earnings underperformance. We further examine this issue by investigating whether a firm's cost behavior (i.e., the relation between expenses and sales) provides an explanation for the apparent inefficiency in executive compensation contracts. Our evidence suggests that executives are rewarded more for increases in ROA that arise from normal cost behavior than other increases in ROA consistent with these increases being perceived as more persistent. In contrast, we do not find such a relationship for decreases in ROA which suggests that executives are largely shielded from decreases in ROA that follow normal cost behavior. We examine two factors suggested by the prior literature, expected future sales and the extent of capacity utilization, which may provide an explanation for why executives are shielded from normal cost behavior decreases in ROA. When these additional factors are included in our empirical models, our evidence suggests that the asymmetric relation between changes in CEO bonus compensation and increases and decreases in earnings performance documented in prior literature goes away. That is, our results suggest that compensation committees do not blindly protect executives for earnings underperformance. On the contrary, our evidence suggests that these committees take into account other non-earnings information when deciding how much weight to give to a decrease in earnings and that executive compensation may not be as inefficient as suggested by prior research.     

Earnings management and firm valuation under asymmetric information

This paper seeks to provide an explanation for why corporate officers manage the disclosure of accounting information. We show that earnings management affects firm value when value-maximizing managers and investors are asymmetrically informed. In equilibrium, the strategic management of reported earnings influences investors' assessments of the market values of companies' shares.     

CEO compensation structure and firm performance

The objectives of our study are to estimate a model of ‘efficient’ compensation structure based on firm characteristics and test the performance consequences of deviation from the efficient compensation structure. Our results are based on 3503 firm years for the period from 1999 to 2005. The results suggest that firms whose CEOs receive compensation inconsistent with their firm characteristics have a lower performance compared to those firms whose CEOs’ compensation is consistent with their firms’ characteristics. Our measure of performance is based on both accounting and market‐based performance measures. Overall, our study provides some important new insights into the links between CEO compensation structure and firm performance.     

法律尽职调查与金融不良资产评估

法律尽职调查和资产评估都是金融不良资产处置中的关键环节,已经获得越来越多的认同和重视。但相关各方对于法律尽职调查和资产评估值的具体工作内容、操作程序以及两者的定位和相互关系还存在着一些模糊认识。本文研究了金融不良资产处置背景下法律尽职调查和资产评估的关系,希望有助于厘清两者的边界和相互的影响。