Bank performance and executive compensation: a managerial discretion perspective

This study investigates how the relationship between bank performance and executive compensation is affected by the degree of an executive’s managerial discretion. Managerial discretion is captured by two industry-specific attributes: a bank’s strategic domain, and its regulatory environment. Executive compensation is found to be more related to bank performance in a context of high managerial discretion than in a context of low managerial discretion. © 1997 by John Wiley & Sons, Ltd.     

How to inhibit a partner's strong and weak forms of opportunism: Impacts of network embeddedness and bilateral TSIs

This study investigates the moderating effects of a firm's network embeddedness and a partner's transactional specific investments (TSIs) on relationships between the firm's TSIs and its partner's strong- and weak-form opportunism, and compares the efficiency among these moderator variables. The regression results suggest that (1) a firm's TSIs are positively related to partner's opportunism when network embeddedness and the partner's TSIs are relatively low; but (2) a firm's TSIs are negatively related to partner's opportunism when network embeddedness and the partner's TSIs are relatively high. Furthermore (3) network embeddedness is more effective in inhibiting partner's weak-form opportunism than in inhibiting strong-form opportunism resulting from the firm's TSIs. Finally (4) with regard to the relationship between TSIs and weak-form opportunism, the negative moderating effect of network embeddedness is greater than the negative moderating effect of partner's TSIs. This study explains reasons why conflicting views exist about the relationship between TSIs and partner's opportunism, reveals the differences in the moderating effects of network embeddedness and partner's TSIs, and makes new contributions to both transaction cost theory and embeddedness literature. It also provides, for firms involved in TSIs in a buyer–supplier relationship, insightful managerial suggestions about ways to reduce their partner's varying forms of opportunism.     

Social influence effects and managerial compensation evidence from Germany

I extend existing theories of social influence effects on executive compensation while at the same time showing the context dependence of these effects. Using original data on German firms and a longitudinal design, results of this study suggest that the operating of social influence mechanisms depends on demographic and social similarity between CEOs and board chairs. The findings reconcile previous mixed findings on the role of CEO human capital factors such as education and tenure and furthermore show that board vigilance is conditional on board compensation and the presence of major shareholders with an incentive to monitor board behavior. Finally, the study contributes to compensation and corporate governance research by providing evidence on how social influence effects operate outside the United States. Copyright © 2006 John Wiley & Sons, Ltd.     

The effect of compensation program and structure on sbu competitive strategy: A study of technology-intensive firms

In this paper we examine the impact various compensation programs have upon business-level strategy for technology-intensive firms. Similarly, we examine the effect of centralization of R&D and non-R&D decision-making, formality of procedures, and SBU size on competitive strategy. Analysis of data from 79 SBUs suggest that there is a resource trade-off between marketing-oriented strategies and R&D-oriented strategies, and that managers who operate under certain types of compensation programs will tend to favor R&D/innovation strategies and capital investment over other alternatives. Structure and competitive position also appear to play a significant role in determining technology and investment strategy.     

投资者保护执行与高管薪酬关系的研究

文章以我国2005-2008年度沪深两市所有上市公司为样本,考察了投资者保护执行对高管薪酬的影响。研究发现,在控制了其他因素的影响后,投资者保护执行对上市公司高级管理人员的薪酬具有显著的正向影响。研究结果表明,投资者保护执行制度没有对公司治理起到应有的促进作用。     

The effects of managerial ownership on international and business diversification: Balancing incentives and risks

Research has examined the effects of managerial share ownership on business diversification, typically from the incentive alignment perspective. Yet, share ownership also shifts risk to managers (the efficient managerial contracting perspective). Furthermore, the effects of managerial ownership on international diversification are unexplored. We examine how managerial ownership influences both international and business diversification in light of the trade‐off between incentive alignment and risk bearing. Based on the differing risk profiles of the two types of diversification, we argue that incentive contracts with higher levels of managerial ownership will be inefficient, i.e., counter to shareholder interests—reducing international diversification and increasing business diversification. Our findings support our arguments for international diversification. We find no significant effect for business diversification after accounting for endogeneity and serial correlation. Copyright © 2013 John Wiley & Sons, Ltd.     

高管薪酬激励、创业战略导向与创业型企业成长性关系研究

本文基于2012～2014年创业板上市公司的非平衡面板数据,研究了高管薪酬激励与创业型企业成长性之间的关系,探讨了创业战略导向作为企业内部的增长战略倾向对上述关系的调节作用。研究结果表明：高管货币薪酬、权益薪酬、薪酬差距与创业型企业成长显著正相关;创业战略导向会负向调节高管货币薪酬与创业型企业成长性之间的关系、正向调节权益薪酬与创业型企业成长性之间的关系,而对薪酬差距与创业型企业成长之间关系的调节作用未得到验证。     

Industrial dynamics and managerial networking in an emerging market: the case of China

This study examines how industrial conditions influence the level of executives' managerial networking with decision‐makers in other entities such as buyers, suppliers, competitors, distributors, and regulators in an emerging market. Corroborating a view that social capital holds contingent value, we theorize that executives facing different industrial conditions have different levels of commitment to exploiting interpersonal ties for fulfilling organizational needs. We propose that managerial networking is influenced by exogenous industrial attributes such as structural uncertainty, sales growth, regulatory stringency, competitive pressure, and production capacity utilization. Our analysis of executives in 364 firms in China demonstrates that the level of managerial networking increases when uncertainty, regulation, and competition increase and production capacity utilization decreases. For a specific firm, the link between industrial dynamics and managerial networking is moderated by its strategic proactiveness. Copyright © 2003 John Wiley & Sons, Ltd.     

高管薪酬激励、产权性质与企业绩效——基于股权集中度的调节效应

本文以高管薪酬激励为视角,将高管薪酬激励、股权集中度与企业绩效放在一个统一的分析框架下,以产权性质为依据,收集了 2007~2015 年国有企业与民营企业的面板数据,分别实证检验了高管薪酬激励与企业绩效的关系,以及股权集中度是否在其中发挥调节作用。研究发现：高管薪酬激励对企业绩效有显著的促进作用,并且国有企业中的促进作用要强于民营企业;股权集中度在国有企业中对于高管薪酬激励与企业绩效之间的关系有显著的负向调节作用,而在民营企业中不存在显著调节作用。     

Strategic reward systems: a contingency model of pay system design

A limited number of studies have addressed the idea of ‘strategic’ reward systems—the matching of compensation systems to a firm's strategy. Prior research on this topic has been confined to U.S. firms, however, and a number of key questions remain unanswered. Using a sample of 917 employees from two large Swiss financial institutions, we found that pay systems are linked with divisional strategic orientation, but in a different form than prior studies. Additionally, we identify hierarchical position as an important variable in the tailoring of reward systems. Hierarchy has a significant main effect on pay plan design, and an interactive effect with strategic orientation. Copyright © 2001 John Wiley & Sons, Ltd.     

Thinking strategically about thinking strategically: the computational structure and dynamics of managerial problem selection and formulation

A new model of managerial problem formulation is introduced and developed to answer the question: ‘What kinds of problems do strategic managers engage in solving and why?’ The article proposes that a key decision metric for choosing among alternative problem statements is the computational complexity of the solution algorithm of alternative statements. Managerial problem statements are grouped into two classes on the basis of their computational complexity: P‐type problems (canonically easy ones) and NP‐type problems (hard ones). The new model of managerial cognitive choice posits that managers prefer to engage with and solve P‐type problems over solving NP‐type problems. The model explains common patterns of managerial reasoning and decision making, including many documented ‘biases’ and simplifying heuristics, and points the way to new effects and novel empirical investigations of problem solving‐oriented thinking in strategic management and types of generic strategies, driven by predictions about the kinds of market‐ and industry‐level changes that managers will or will not respond to. Copyright © 2009 John Wiley & Sons, Ltd.     

Making the most of what you have: managerial ability as a source of resource value creation

The current study investigates a central premise of the resource‐based view of the firm—that managers are a potential source of value creation for the firm. Using data from professional sports teams, we test theory regarding the effects of managerial ability, human resource stocks, and managers' actions on resource value creation. While results indicate managerial ability affects resource productivity, this effect is less pronounced with increases in the quality of firm resources. Further, we investigate the extent to which managerial actions that synchronize resource bundles account for the influence of managerial ability and resource context on a firm's performance advantage. These results contribute to our understanding of resource management and provide empirical evidence for the importance of managerial ability in the resource‐based view. Copyright © 2008 John Wiley & Sons, Ltd.     

CEO duality,succession, capabilities and agency theory: commentary and research agenda

We offer a new explanation for the relationship between CEO duality and firm performance that accounts for managerial capabilities and succession planning. Our reinterpretation of findings by Worrell, Nemec and Davidson (1997) is consistent with the new explanation. We also make suggestions for future research. © 1998 John Wiley & Sons, Ltd.     

The impacts of performance relative to analyst forecasts and analyst coverage on firm R&D intensity

Taking an agency theory perspective of managers as risk averse and self‐interest seeking and focusing on externally generated analyst forecasts as the performance target, we propose that managers tend to cut R&D expenses when they are under pressure to meet analyst forecasts, especially when they face an increase in employment risk after missing the forecasts. We further argue that analyst coverage can serve as an external monitoring mechanism to help contain this agency problem. We test these arguments with data from a sample of U.S. manufacturing firms during the period of 1979 to 2005. Copyright © 2012 John Wiley & Sons, Ltd.     

Business relatedness and performance: a study of managerial perceptions

Understanding of business relatedness and performance effects is the foundation of any diversification decision, but we have limited knowledge of how managers consider relatedness. This study identified relatedness classes and performance effects using perceptual survey data from top industrial executives. Four classes with significant variable differences were found: high, technology, customer, and low relatedness. Technology relatedness had a strong positive performance effect and high relatedness had a negative effect. The findings confirm that perceptions are multidimensional, but may include five key factors rather than the previously identified attribute categories of product–markets, resources, and value chains. Contributions to diversification literature are discussed. Copyright © 2006 John Wiley & Sons, Ltd.     

Determinants of alliance partner choice: Network distance,managerial incentives,and board monitoring

Research Summary: We ask if managerial opportunism is a significant problem in alliance partner choice and examine the role of corporate governance mechanisms in explaining this choice. Using a sample of 313 alliances of U.S. firms from the pharmaceutical and biotechnology industries from 1992 to 2010, we find that managerial incentives lead to managerial preference for relationally risky distant partners over existing and new close partners. Further, board monitoring encourages managers to pursue existing and distant partners over new close ones, choices aligned with shareholder interests. In addition, we find that board monitoring substitutes for managerial incentives in alliance partner choice. We contribute to the literature on alliance partner choice to identify an important, and hitherto, unexplored perspective. Managerial Summary: This article examines whether managers and shareholders view alliance‐related risks differently, and how the divergent interests between managers and shareholders affect alliance partner choice. We argue that managers’ concern about their loss of employment and compensation from alliance failure impedes the choice of relationally risky alliance partners that may increase shareholder value. We also argue that managerial stock ownership and board monitoring mitigate this managerial propensity. Our findings suggest that stock ownership owned by managers and strong board monitoring are effective governance mechanisms to align managers’ interests with those of shareholders. Our study offers a novel perspective to understand alliance partner choice by viewing the firm as an entity comprised of fragmented interests.     

CEO incentives,innovation, and performance in technology‐intensive firms: a reconciliation of outcome and behavior‐based incentive schemes

Building on the agency view of corporate governance, we propose that technology‐intensive firms use both outcome and behavior‐based performance criteria for rewarding CEOs. Using a sample of 206 firms from 12 U.S. manufacturing industries, we find that as technological intensity increases CEO bonuses are more closely linked to financial results and that total CEO incentives are associated with two indicators of desirable innovation behaviors: invention resonance and science harvesting. Invention resonance refers to the impact a firm's inventions have on other firms' inventions, while science harvesting reflects a firm's commitment to scientific research. As technological intensity increases, aligning bonus with financial results, total incentives with invention resonance, and total incentives with science harvesting predict firm market performance. Copyright © 2006 John Wiley & Sons, Ltd.     

Organizational governance and employee pay: how ownership structure affects the firm's compensation strategy

This research investigated how the ownership structure is related to the firm's overall compensation strategy. The findings extend previous research that focused primarily on CEO compensation strategy. We show that there are significant differences in the compensation practices that apply to all employees as a function of the ownership structure. The results show that for owner‐controlled firms and owner‐managed firms there is significant pay/performance sensitivity for all employees. In management‐controlled firms, changes in pay are related to changes in size of the firm. These findings lead us to conclude that ownership structure not only affects upper management's pay, but also the pay of all employees through substantial differences in the firm's compensation practices. Copyright © 2005 John Wiley & Sons, Ltd.     

Dynamic managerial capabilities: Configuration and orchestration of top executives' capabilities and the firm's dominant logic

This paper contributes to the understanding of the executive team dynamic managerial capabilities by developing theory about the interplay between the firm's dominant logic and dynamic managerial capabilities (including managerial human capital, social capital, and cognition). We underscore the criticality of the two key CEO‐level functions: configuration and orchestration of senior executive team dynamic capabilities. We develop theory on how these functions create and sculpt the management team's absorptive capacity, which in turn shapes the team's adaptive capacity. We present theory about the distributed nature of efforts for organizational renewal where CEO's dynamic managerial capabilities in concerto with senior executive managerial capabilities will drive top management's ability to revitalize the firm's dominant logic and to achieve evolutionary fit. Copyright © 2012 John Wiley & Sons, Ltd.