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1 – 10 of over 41000Min Bai, Dong Zhang and Wenzhuo Zhao
Excessive borrowing significantly contributes to pushing businesses towards default and their transition into zombie enterprises. Despite government efforts to implement…
Abstract
Purpose
Excessive borrowing significantly contributes to pushing businesses towards default and their transition into zombie enterprises. Despite government efforts to implement deleveraging policies and guide bank credit flows, it’s essential to delve into the internal dynamics that steer the borrowing behavior of these zombie enterprises at a micro level. To gain a comprehensive understanding of the issue, this study focuses on examining the incentives that drive corporate executives of zombie enterprises to consistently engage in large-scale borrowing from banks.
Design/methodology/approach
In this study, panel data analysis is utilized, incorporating firm-, industry- and year-fixed effects. Drawing from data pertaining to listed companies in China spanning from 2007 to 2020, we employ a one-by-one identification method to pinpoint zombie enterprises. Ultimately, a total of 2,533 samples of zombie enterprises were obtained.
Findings
The results indicate that as bank loans to zombie enterprises increase, executive monetary compensation decreases, while on-the-job consumption by executives increases, and they are less likely to be forced into rotation. Mechanism testing reveals that corporate performance partially mediates the relationship between bank loans and executive monetary compensation, but this mediation is ineffective for on-the-job consumption and job rotation. Further investigation suggests that the property rights nature of central enterprises and modified audit opinions can exacerbate the adverse impact of bank loans on the monetary compensation of zombie corporate executives, without significantly affecting on-the-job consumption or job rotation. Conversely, executive power does not enhance the positive effects of bank loans on monetary compensation or on-the-job consumption, but it diminishes the negative impact of bank loans on the forced rotation of zombie executives.
Research limitations/implications
These results indicate that while bank loans may have a negative impact on corporate value, they function as safeguards for the positions and interests of executives. As a result, bank loans serve as incentives for executives of zombie enterprises.
Originality/value
This study holds theoretical significance as it explores the motivations behind non-performing loans in high-borrowing enterprises, sheds light on corporate governance challenges encountered by zombie enterprises and provides policy insights aimed at addressing the underlying causes of persistent non-performing loans in high-borrowing enterprises, including zombie enterprises.
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Amparo Nagore and Constantino José García Martín
In the context of sustainable development goal 5 of the United Nations 2030 Agenda: “Achieve gender equality and women’s empowerment”, where gender equality is not only a matter…
Abstract
Purpose
In the context of sustainable development goal 5 of the United Nations 2030 Agenda: “Achieve gender equality and women’s empowerment”, where gender equality is not only a matter of justice but also essential to achieve sustainable development, this paper aims to examine the gender pay gap in executive director compensation and the influence of female board representation and participation in nomination and remuneration committee (NRC) on this gap in Spanish listed firms over the period 2012–2022.
Design/methodology/approach
The analysis is conducted using a data set created by the authors, which includes executive director compensation data for 164 unique firms. This data set comprises 128 distinct observations for a given firm and year for women, and 2,333 observations for men. The authors estimate ordinary least squares models, clustering standard errors by executive. The authors use Oaxaca-Blinder decomposition to decompose gender differences in compensation into differences in the characteristics of men and women and differences in the return on the same characteristics.
Findings
The authors find evidence of pay penalty for female executive directors compared to male counterparts. After controlling for firm, board and executive characteristics, the authors find that women earn 27% less than comparable men. The penalty is lower in companies with a higher share of women on the compensation committee, suggesting that women’s participation plays a role in setting a more equal remuneration policy. The gender gap in executive compensation narrows over time due to a substantial reduction of the differences between men and women in both characteristics and the return on these characteristics.
Originality/value
This study is one of the few analysing the gender gap in executive director compensation and its evolution in Spain. It specifically explores how gender diversity on both the board and the NRC impacts this gap. The analysis is focused on the most recent period characterized by important efforts to promote gender diversity.
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Doreen Lilienfeld, John Cannon, Amy Gitlitz Bennett and George Spera
The purpose of this paper is to explain the amendments to the listing standards of the New York Stock Exchange (NYSE) and the NASDAQ Stock Market (Nasdaq), which were approved by…
Abstract
Purpose
The purpose of this paper is to explain the amendments to the listing standards of the New York Stock Exchange (NYSE) and the NASDAQ Stock Market (Nasdaq), which were approved by the Securities and Exchange Commission (the SEC) on January 11, 2013 to implement the SEC's final rules on the independence of compensation committees and their selection of advisors pursuant to Rule 952 of the Dodd‐Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd Frank).
Design/methodology/approach
After a summary of notable provisions, the paper explains effective dates and respective Nasdaq and NYSE listing standards pertaining to compensation committee compensation; director independence standards, advisors, and charters; certain exemptions for foreign issuers; exemptions for certain types of companies and partnerships; and recommended next steps for companies that are subject to the amended listing standards.
Findings
Over the past few years, the independence of compensation committees and their advisors has been a hot button corporate governance issue. Dodd‐Frank prohibits national securities exchanges from listing any equity security of an issuer that is not in compliance with the exchanges' compensation committee independence and advisor requirements.
Practical implications
The listing standards generally become effective on July 1, 2013; however, listed companies have until the earlier of: their first annual meeting after January 15, 2014; or October 31, 2014, to comply with certain requirements including the independence structure of their compensation committees.
Originality/value
The paper provides practical advice from experienced financial services lawyers.
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Nina T. Dorata and Steven T. Petra
This study seeks to examine whether CEO duality further exacerbates CEOs' motivation of self‐interest to engage in mergers and acquisitions to increase their compensation.
Abstract
Purpose
This study seeks to examine whether CEO duality further exacerbates CEOs' motivation of self‐interest to engage in mergers and acquisitions to increase their compensation.
Design/methodology/approach
Regression tests using CEO compensation as the dependent variable, and CEO duality, firm size and firm performance as independent test and control variables. The regression tests are used for various sub‐samples of the firms, those that merge and those that have CEO duality.
Findings
The results indicate that for merging firms CEO compensation is positively associated with firm size. However, this association is unaffected by CEO duality. For non‐merging firms, the results indicate that CEO compensation is positively associated with firm size and firm performance. CEO duality moderates the positive association between CEO compensation and firm performance.
Research limitations/implications
This study is limited to the extent that it does not observe the deliberations of compensation committees in their setting of CEO compensation, but only examines the outcomes of those deliberations. A future area of research is to examine compensation schemes of merger/acquisition CEOs in the context of other government structures, such as board independence and composition.
Practical implications
Shareholders who desire to keep CEO compensation levels positively associated with firm performance may consider supporting the separation of the positions of CEO and Chairperson of the Board.
Originality/value
This study contributes to the literature by concluding that governance structure influences CEO compensation schemes and CEOs of merging firms command higher compensation in spite of governance structure and firm performance.
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The purpose of this paper is to focus on the problems of compensation for compulsory acquisition of oil exploration fields in Delta State with particular reference to the oil…
Abstract
Purpose
The purpose of this paper is to focus on the problems of compensation for compulsory acquisition of oil exploration fields in Delta State with particular reference to the oil field acquired by Agip Oil Company for gas pipeline way leave in Irri and Okpai towns of Delta State.
Design/methodology/approach
A survey was conducted in which questionnaires were administered on some residents whose lands were acquired compulsorily on one hand and some estate surveying and valuation firms who are professionals in the fields of compensation on the other hand. The data collected were analyzed and presented using simple statistical methods.
Findings
The findings in this paper show that the compensation paid to residents whose lands were acquired is grossly inadequate, since professionals are not always involved in the process.
Practical implications
The paper shows that the issue of compensation for compulsory acquisition for oil exploration is very central in the oil‐rich Niger‐Delta, and if this is not handled carefully, it can lead to uncontrollable crisis.
Originality/value
This paper empirically examined the process involved in compulsory acquisition and compensation of land in the Niger‐Delta for oil exploration with a view to determining the adequacy or otherwise of the compensation paid.
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Christopher P. Reynolds and Richard W. Black
In recent years, the compensation practices of employers, including financial services firms, have come under increasing attack by the government and private plaintiffs amid…
Abstract
In recent years, the compensation practices of employers, including financial services firms, have come under increasing attack by the government and private plaintiffs amid allegations of pay discrimination. These attacks have taken place in a number of forums, ranging from administrative investigations, to single‐plaintiff and multi‐plaintiff litigation and, perhaps most significantly, to the class action arena. An employer’s potential exposure in these types of cases ‐ especially those brought on behalf of multitudes of employees ‐ can be significant. This past summer, for example, Morgan Stanley announced a $54 million settlement with the Equal Employment Opportunity Commission of a class action that included claims of gender discrimination in pay. Shortly thereafter, The Boeing Co. agreed to pay up to $72.5 million to settle a class action gender discrimination suit brought by approximately 29,000 salaried and hourly female employees alleging discrimination in pay, promotions, overtime, assignments, bonuses, and other conditions of employment. In the well‐publicized Wal‐Mart employment discrimination class action, the district court certified a class action involving pay discrimination claims covering more than one million women in both hourly and salaried jobs in Wal‐Mart’s 3,400 stores across the nation. And, last year, a law firm primarily engaged in representing plaintiffs in discrimination litigation was enlisted by the National Council of Women’s Organizations to investigate alleged discrimination at Wall Street firms, including compensation discrimination.
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Yu Hsing and Wen‐Jeng Lin
CEOs' compensation has received a great deal of attention in recent years. Some criticised that CEOs' compensation is not responsive to their performance, because some CEOs still…
Abstract
CEOs' compensation has received a great deal of attention in recent years. Some criticised that CEOs' compensation is not responsive to their performance, because some CEOs still received the same or more compensation even if their companies incurred losses. Others complained that the compensation received by some of the CEOs was so astronomical that it can not be justified with any rational explanations. Many also maintained that some CEOs do not care about employees' wellbeing and shareholders' interest in the determination of their compensation in view of the facts that many workers received pay cuts or declining compensation in real terms and are laid off in the re‐structuring of organisations in order for firms to become more competitive domestically and worldwide.
Yu Liu, Jie Hao, Panli Kang, Zhihua Sha, Fujian Ma, Dapeng Yang and Shengfang Zhang
The purpose of this paper is to establish a rigid–flexible coupling model of wind turbine disc brake to simulate the actual working condition of the wind turbine brake and to…
Abstract
Purpose
The purpose of this paper is to establish a rigid–flexible coupling model of wind turbine disc brake to simulate the actual working condition of the wind turbine brake and to study the dynamic characteristics of the compensation mechanism under different friction coefficients and braking force. It provides reference for the structure design and optimization of the compensation mechanism (compensation brake wear) in the wind turbine brake.
Design/methodology/approach
Based on multi-body contact dynamics theory, the rigid‒flexible coupling dynamic model of wind turbine brakes with compensation mechanism is established, in which the contact process of the components in the compensation mechanism and the phenomenon of rotation and return are described dynamically, and the rotation angle of the compensation nut and the axial displacement response of the compensation screw are calculated under different parameters.
Findings
The analysis results show that the braking reliability of the brake compensation mechanism can be effectively improved by increasing the friction coefficient of threads or increasing the friction of push rod contact surface; increasing the braking force can also improve the reliability of brake compensation mechanism, but when the braking force comes over a critical value, the effect of braking force on the reliability of the brake is very small. The braking test verifies the effectiveness of the simulation results.
Originality/value
Analyzing the influence of compensation mechanism on braking reliability in the braking process is of great practical significance for improving the braking efficiency and process safety of wind turbine brake.
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Richard H. Fosberg and Joe F. James
Jensen and Murphy (1990) and others have found a small but statistically significant relationship between firm performance (as measured by change in shareholder wealth or firm…
Abstract
Jensen and Murphy (1990) and others have found a small but statistically significant relationship between firm performance (as measured by change in shareholder wealth or firm profits) and executive compensation. In this study we investigate the pay‐ performance relationship further by considering the relationship between an outside measure of firm performance (changes in the firm's bond rating) and the contemporaneous change in the compensation of the firm's CEO. We find that when a firm's bond rating is down‐graded, CEO total compensation declines by a relatively small amount ($165,500) and when a firm's bond rating is upgraded, CEO total compensation increases markedly ($3,202,900). Thus, while a positive pay‐performance relationship exists, the relationship is not symmetric. CEO compensation changes (increases) much more when firm performance improves than it changes (decreases) when firm performance declines. Further, most of the change in CEO compensation occurs in the stock gains (profits from the exercise of stock options) category for both firms experiencing bond rating upgrades and down‐grades.
This article examines the rule issued by the Securities and Exchange Commission in August 2015 that requires most SEC-reporting companies to disclose annually the ratio of the…
Abstract
Purpose
This article examines the rule issued by the Securities and Exchange Commission in August 2015 that requires most SEC-reporting companies to disclose annually the ratio of the annual total compensation of their chief executive officer to the median of the annual total compensation of their employees other than the CEO.
Design/methodology/approach
This article provides an in-depth analysis of the operation of the controversial pay ratio disclosure rule against the backdrop of concerns expressed by many commenters on the rule proposal, as well as by the two Commissioners who dissented from adoption of the rule, that the disclosure will not provide meaningful information to investors and will be excessively costly and burdensome for companies to produce.
Findings
The SEC fashioned the final pay ratio disclosure rule with a vaguely defined statutory purpose to guide it and a heavy volume of comments on its rule proposal that urged widely disparate approaches to implementation. In overhauling the proposed rule, the SEC sought to satisfy its mandate under the Dodd-Frank Act while providing companies with flexibility in implementing the new rule that it believes will reduce compliance costs and burdens.
Originality/value
This article provides expert guidance on a major new SEC disclosure requirement from experienced securities lawyers.
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