Executive Remuneration and Corporate Divestment: Motivating Managers to Make Unpalatable Decisions

Abstract:  This study examines the impact of voluntary divestment on executive remuneration, using an unbalanced panel of 107 UK quoted companies over the period 1988 to 1993. It employs a dynamic compensation equation, with a vector of controls and alternative specifications of the divestment effect. The results show no general direct evidence of a remuneration process that rewards managers for downsizing their firms. Indeed the substantial pay-size elasticity implies the reverse. However, divestment does have a positive and significant effect in raising executive remuneration under a regime of strong corporate governance, defined in terms of the presence of a substantial blockholder.     

Examining retail image before and after a repositioning strategy

This research examines changes in management's and consumers' perceptions of retail image during implementation of a major repositioning strategy. A prominent retail chain abandoned an older store in a strip shopping center of a southern SMSA, and built a larger one in a new regional shopping mall. Consumers and store management personnel provided image data for the old and new stores three months before and after the changeover. It was found that while consumers' and management's images significantly changed during the repositioning strategy, the magnitude of management's image change was significantly greater than consumers'. Management perceived greater changes than did consumers in parking, store classification, merchandise quality, style and assortment, return policy, and store layout and decor. Conversely, consumers experiented a greater image change on pricing and credit policy. The major implication for retailers is that problems can arise if management and consumers do not experience commensurate image shifts during repositioning. Fine tuning in advertising, personal selling, product strategy, and the physical environment (e.g., decor, parking) may be necessary to compensate for differential image shifts following a major repositioning strategy. *** DIRECT SUPPORT *** A00BV035 00002     

The effect of board capital and CEO power on strategic change

We develop the construct of board capital, composed of the breadth and depth of directors' human and social capital, and explore how board capital affects strategic change. Building upon resource dependence theory, we submit that board capital breadth leads to more strategic change, while board capital depth leads to less. We also recognize CEO power as a moderator of these relationships. Our hypotheses are tested using a random sample of firms on the S&P 500. We find support for the effect of board capital on strategic change, and partial support for the moderating effect of CEO power. Copyright © 2010 John Wiley & Sons, Ltd.     

Is there income mobility in the Philippines?

Despite a more robust economic performance over the past decade compared with the 1980s and 1990s, growth in average household income is still far below what might be expected given the pace of economic expansion in the Philippines. Inequality of household income has also remained high, which leads to the question: is there income mobility in the Philippines? Using longitudinal data from three years of the redesigned Philippine Family Income and Expenditure Survey (2003, 2006, and 2009) and a variety of analytical tools, we examine the mobility of Filipino household income and show that it is less stagnant than is conventionally perceived. Empirical evidence suggests that significant positive and negative mobility exists; albeit, the two tend to offset each other, contributing to slow household income growth at the aggregate level. In addition, there is some evidence that transitory fluctuations contribute significantly to the observed level of income mobility. Overall, the findings are robust across different analytical tools used in measuring income mobility.     

Expiration day effects: The case of Hong Kong

Regulators around the world often express concerns about the high volatility of stock markets due to index derivative expirations. Earlier studies of expiration day effects have found large volume effects, abnormal return volatility, and price effects during the last hour of trading on expiration days when the settlement is based on the closing price. This article examines the impact of the expiration of Hang Seng Index (HSI) derivatives on the underlying cash market in Hong Kong for the period from 1990 to 1999. The HSI derivative market is different from most other markets in the sense that the settlement price is computed by taking the average of 5‐minute quotations of the HSI on the last trading day, thus providing an alternative setting for testing expiration day effects. Our empirical findings indicate that expiration days in Hong Kong may be associated with a negative price effect and some return volatility on the underlying stock market, but there is no evidence of abnormal trading volume on the expiration day, or price reversal after expiration. Thus, the existence of expiration day effects cannot be confirmed in the Hong Kong market. [JEL classification: G13; G14; G15]. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:67–86, 2003     

(Re)figuring accounting and maternal bodies: The gendered embodiment of accounting professionals

This paper examines the relationship between the body and the self for women accounting professionals. It explores how they come to embody the identity of accountant and what happens when forms of organizational and professional embodiment coincide with other forms of gendered embodied self, such as that experienced during pregnancy and in early motherhood. These forms of embodiment can be seen simultaneously both as a mechanism of social control, and as a form of self-expression and empowerment for women.     

New Development: The Demystification of Knowledge Management for Public Services

The public sector should be cautious about the use of classical and technological approaches to knowledge management. There is a need to face the power struggles and organizational politics associated with knowledge growth and dissemination. Knowledge management should promote the high value of team-based professional work and the desire to retain such staff through a collaborative environment.     

The Impact of Divestment on Firm Performance: Empirical Evidence from a Panel of UK Companies

It has widely been suggested that during the 1980s many diversified firms narrowed the scope of their activities by refocusing on core businesses, primarily through divestment activity. This study examines the impact of divestment on firm performance, using an unbalanced panel of 132 UK quoted companies over the period 1985 to 1993. The results suggest that divestment has a positive, significant and substantial effect in raising the profitability of the vendor company. We find limited support for the view that the benefit from divestment is greater for larger and/or more diversified firms and firms operating with weak governance arrangements.     

Resiliency in the E-mini futures market

We study how quickly liquidity is replenished on the order book in E-mini futures. The results show that participants who use patient methods, such as limit orders, are often fast to place new orders, while those using impatient market orders are slow to re-enter the market. These delays are a function of state constants, such as firm types, state conditions, such as whether the order is price improving, and time-varying covariates, such as the volume of trade during the gap. We also find support for the view that certain traders delay providing liquidity during active markets to avoid informed trading.