The remuneration of CEOs and corporate financial performance in Norway

Economics and management literatures advocate that senior company executives should be remunerated on the basis of the financial performance of the firms they manage. This helps align the interests of management with those of stockholders. There are, however, problems in implementing pay for performance schemes and these, along with other factors, may lead to there being no empirical relationship between compensation and stockholder returns. This study set out to explore the determinants of chief executive compensation in Norwegian stock exchange listed firms. To date there have been very few studies on this topic using data from Norway; most previous research has employed American data. The results show a positive relationship between CEO pay and corporate size but there was no significant association between remuneration and corporate financial performance as measured by accounting profitability and as measured by stock returns. Estimates of the value added by companies were significantly related to chief executive pay. There was also a positive and significant relationship between a CEO's compensation and the average wage level of the company. This association may be due to the unique characteristics of Norway's social and economic structure.     

Non-cooperative exploitation of multi-cohort fisheries—The role of gear selectivity in the North-East Arctic cod fishery

North-East Arctic cod is shared by Russia and Norway. Taking its multi-cohort structure into account, how would optimal management look like? How would non-cooperative exploitation limit the obtainable profits? To which extent could the strategic situation explain today’s over-harvesting? Simulation of a detailed bio-economic model reveals that the mesh size should be significantly increased, resulting not only in a doubling of economic gains, but also in a biologically healthier age-structure of the stock. The Nash equilibrium is close to the current regime. Even when effort is fixed to its optimal level, the non-cooperative choice of gear selectivity leads to a large dissipation of rents.     

Election outcomes and financial market returns in Canada

This paper investigates the relationship between federal election outcomes and expected returns and volatilities in the Canadian money, bond, equity and currency markets from 1951 to 2006. There is little evidence that investment opportunities are different in minority versus majority parliaments and only money market returns differ in Conservative versus Liberal governments. The equity market performs better in the late part of the electoral cycle than in the first two years. Furthermore, the Canadian equity investment opportunities are better in Democratic versus Republican administrations and in the late versus early parts of the presidential electoral cycle. The Canadian dollar is also affected by American election outcomes. No apparent variation in risk or expected state of the economy accounts for the differences in returns.     

Consumer Affairs in Rural New Zealand

Recent changes in many areas of Government policy as well as changes in the private sector have had major impacts on the provision of services in rural areas of New Zealand. This report describes the results of a New Zealand survey of 795 rural consumers. The results emphasise how the problems perceived as most important to people in rural areas are essentially linked to fundamental services such as housing, water, communications, and transport. Though this element of basic needs is covered in the consumer policy literature it is not a feature that tends to be emphasised. The survey also gauges some aspects of rural consumers' knowledge of their entitlements under New Zealand consumer law and their familiarity with, and use of, consumer advisory and support services.     

Price as a risk indicator

Ignorant consumers quite often face a risk when they purchase a brand of some commodity. Three types of risks are considered: financial risk, performance risk, and physical risk. It is attempted to quantify these risks using data fromConsumer Reports. Consumers may try to avoid these risks by buying high-priced brands, thus using price as a risk indicator. The major purpose of the paper is to investigate whether in fact price is a good risk indicator.

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Der Preis als Risiko-Indikator

Zusammenfassung Verbraucher haben häufig keine gute Kenntnis von der Qualität einer Produktmarke, die sie gerade kaufen wollen, sondern empfinden eher ein gewisses Risiko beim Kauf. Anhand von Daten aus der amerikanischen TestzeitschriftConsumer Reports der Jahre 1975 bis 1985 läßt sich abschätzen, daß ungefähr 1% der üblichen Konsumgüter nicht akzeptable Produkte sind. Für Konsumenten mag es rational sein, eine teurere Produktvariante zu kaufen, um dieses Risiko zu vermeiden. Der vorliegende Beitrag geht der Frage nach, ob das tatsächlich eine erfolgreiche Einkaufs-Strategie ist. Berücksichtigt werden dabei allerdings nur die objektiven Risiko-Komponenten wie funktionale oder gesundheitliche Risiken, denn für psycho-soziale Risiken gibt es keine Daten.Analysiert man diejenigen Marken, die inConsumer Reports als nicht akzeptable bewertet wurden, so zeigt sich, daß der Preis tatsächlich ein Risiko-Indikator sein kann — vorausgesetzt allerdings, die Konsumenten kennen diejenigen Produkte, bei denen es nicht-akzeptable Varianten gibt.Ein zweiter Ansatz besteht in der Analyse derjenigen Produktmerkmale, die inConsumer Reports zu der Teilbewertung sehr schlecht geführt haben und die einem Käufer vermutlich unliebsame Überraschungen bereiten werden. Daten für über 2,000 Produktvarianten und 13,500 (Teil-)Bewertungen aus der Zeit von 1978 bis 1980 zeigen, daß das Risiko, eine Marke mit mindestens einem Merkmal mit der Teilbewertung sehr schlecht zu erhalten, tatsächlich mit steigenden Preis abnimmt — wenn auch nicht sehr stark.

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Chr. Hjorth-Andersen is Associate Professor at the Institute of Economics, University of Copenhagen, Studiestraede 6, 1455 Copenhagen K, Denmark. Financial support from the Danish Council for Social Science Research is gratefully acknowledged. Programming assistance was ably provided by Timm Larsen and data collection by Kirsten Thune. The paper has benefited from comments from a number of colleagues as well as from two anonymous referees and the Editor.     

Monitoring or payroll maximization? What happens when workers enter the boardroom?

Review of Accounting Studies - We examine whether worker representation on corporate boards results in improved monitoring or payroll maximization. Several economic theories predict that worker...     

THE EFFECT OF PRICE REDUCTION AND DIRECT INCOME SUPPORT POLICIES ON AGRICULTURAL INPUT MARKETS IN AUSTRIA

The purpose of this paper is to examine empirically the effects of a shift from price support to direct income policy on agricultural factor markets and aggregate output. By utilising an econometric model for the Austrian agricultural sector, it is argued that the main purpose of this policy change, which is to move producers away from making production decisions in response to income support policies and to facilitate their response to market signals (‘decoupling’), is only partially realised. Switching from price to direct income support would result in little reduction in output, but some positive secondary effects can be observed. Ecological goals could be realised by lessening the degree of industrialisation due to lowering the capital-labour and intermediate input-labour ratios.