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Article
Publication date: 11 April 2008

Melissa A. Williams, Timothy B. Michael and Ramesh P. Rao

The purpose of this paper is to examine the risk‐incentive effect of CEO stock options in the banking industry.

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Abstract

Purpose

The purpose of this paper is to examine the risk‐incentive effect of CEO stock options in the banking industry.

Design/methodology/approach

For a sample of industrial mergers, Williams and Rao find that the risk‐incentive effect of CEO stock options is associated with higher post‐merger risk. This result indicates that stock options may be effective in mitigating the agency problem of Jensen and Meckling wherein managers take too little risk on behalf of shareholders. The authors extend the method of Williams and Rao to the banking industry. In particular, they are interested in determining whether the same relationship holds for these highly regulated and leveraged firms.

Findings

Using a sample of 131 bank mergers that took place between 1993 and 2002, the authors determine that the risk‐incentive effect of CEO stock options is positively related to the post‐merger level of equity risk. The results of this study also show that the interaction of size and the risk‐incentive effect is negatively related to volatility following the merger, which agrees with the original study.

Originality/value

This paper extends the literature by examining an industry that is largely ignored because of its highly regulated nature.

Details

Managerial Finance, vol. 34 no. 5
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 11 April 2008

Melissa A. Williams, Timothy B. Michael and Edward R. Waller

The purpose of this paper is to review and summarize research into managerial incentives, merger activity, performance, and the use and structure of compensation to…

3509

Abstract

Purpose

The purpose of this paper is to review and summarize research into managerial incentives, merger activity, performance, and the use and structure of compensation to mitigate agency problems in the firm.

Design/methodology/approach

The authors discuss studies of size elasticity and compensation, pay for performance, changes in managerial compensation due to merger activities, incentives and risk taking, and the relationship between managerial risk aversion and acquisitions.

Findings

The paper identifies several prominent themes in the literature. First, size and performance both appear to be positively related to managerial compensation. There appears to be a strong relation between pay and performance, but results depend upon whether the pay measure includes all forms of compensation. With mergers, any merger gains seem to accrue to the acquired firm. It appears that acquiring managers can increase their pay by merging with other firms, and this is likely to happen in cases where shareholder returns are negative. Regarding managerial risk taking and compensation, it is likely that the sensitivity of a manager's equity‐based compensation (options, in particular) to changes in the total risk of the firm is an indicator of how willing managers will be to seek out more risk on behalf of shareholders.

Originality/value

This paper synthesizes a large body of research into an organized discussion of the issues relating to merger activity, managerial incentives, compensation, and pay for performance issues.

Details

Managerial Finance, vol. 34 no. 5
Type: Research Article
ISSN: 0307-4358

Keywords

Book part
Publication date: 29 August 2018

Paul A. Pautler

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the…

Abstract

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

Details

Healthcare Antitrust, Settlements, and the Federal Trade Commission
Type: Book
ISBN: 978-1-78756-599-9

Keywords

Book part
Publication date: 27 October 2016

Alexandra L. Ferrentino, Meghan L. Maliga, Richard A. Bernardi and Susan M. Bosco

This research provides accounting-ethics authors and administrators with a benchmark for accounting-ethics research. While Bernardi and Bean (2010) considered publications…

Abstract

This research provides accounting-ethics authors and administrators with a benchmark for accounting-ethics research. While Bernardi and Bean (2010) considered publications in business-ethics and accounting’s top-40 journals this study considers research in eight accounting-ethics and public-interest journals, as well as, 34 business-ethics journals. We analyzed the contents of our 42 journals for the 25-year period between 1991 through 2015. This research documents the continued growth (Bernardi & Bean, 2007) of accounting-ethics research in both accounting-ethics and business-ethics journals. We provide data on the top-10 ethics authors in each doctoral year group, the top-50 ethics authors over the most recent 10, 20, and 25 years, and a distribution among ethics scholars for these periods. For the 25-year timeframe, our data indicate that only 665 (274) of the 5,125 accounting PhDs/DBAs (13.0% and 5.4% respectively) in Canada and the United States had authored or co-authored one (more than one) ethics article.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78560-973-2

Keywords

Article
Publication date: 9 January 2017

Matt DeLisi, Alan Drury, Michael Elbert, Katherine Tahja, Daniel Caropreso and Timothy Heinrichs

Sexual sadism is a well-known risk factor for severe forms of sexual violence including sexual homicide and serial sexual homicide. The research is decidedly mixed about…

Abstract

Purpose

Sexual sadism is a well-known risk factor for severe forms of sexual violence including sexual homicide and serial sexual homicide. The research is decidedly mixed about the association between sexual sadism and other, nonsexual forms of criminal conduct. The paper aims to discuss these issues.

Design/methodology/approach

Drawing on data from a census of 225 federal sex offenders from a jurisdiction in the Midwestern USA, the current study examined whether sexual sadism had a spillover effect into nonsexual crimes using correlation, ANOVA, and negative binomial regression models.

Findings

Sexual sadism was strongly associated with diverse forms of nonsexual criminal behavior, and sexual sadists had more extensive and versatile criminal careers than sex offenders without a formal diagnosis.

Practical implications

Practitioners should be aware of sexual sadism as a criminogenic risk factor. Sexual sadism is associated with sexual deviance and sexual violence. Sexual sadism also has spillover effects where it is associated with nonsexual offending.

Originality/value

Sexual sadism can be a useful risk factor for other forms of crime and recidivism and has broad application in applied correctional and research settings.

Details

Journal of Aggression, Conflict and Peace Research, vol. 9 no. 1
Type: Research Article
ISSN: 1759-6599

Keywords

Book part
Publication date: 2 September 2010

Timothy Devinney, Torben Pedersen, Timothy Devinney, Torben Pedersen and Laszlo Tihanyi

This is the first volume of Advances in International Management under the new editorial team of Timothy Devinney, Torben Pedersen and Laszlo Tihanyi. We hope to continue…

Abstract

This is the first volume of Advances in International Management under the new editorial team of Timothy Devinney, Torben Pedersen and Laszlo Tihanyi. We hope to continue the tradition established by our predecessors, Joseph Cheng and Michael Hitt, and also will work to bring a new perspective to the series. It is our intention to use the series less as a journal or book series and more as a forum for ideas and discussion – a view that builds on the tradition of the series but also aims to put it in juxtaposition to traditional publication outlets.

Details

The Past, Present and Future of International Business & Management
Type: Book
ISBN: 978-0-85724-085-9

Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

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Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

Keywords

Article
Publication date: 17 June 2006

Timothy Kiessling and Michael Harvey

As organizations have expanded globally, control mechanisms utilized in the past may need to be supplemented with a new type of personnel, that of the inpatriate…

Abstract

As organizations have expanded globally, control mechanisms utilized in the past may need to be supplemented with a new type of personnel, that of the inpatriate. Expatriates were the most widely used staffing for corporate control, but due to various issues, a complementary set of employees to facilitate corporate goals could be utilized. Inpatriation, as a practical and conceptual means to augment expatriation, is discussed, compared with, and contrasted to, expatriation. This research explores the use of inpatriates in facilitating global control.

Details

Multinational Business Review, vol. 14 no. 2
Type: Research Article
ISSN: 1525-383X

Keywords

Book part
Publication date: 7 December 2016

Abstract

Details

The World Meets Asian Tourists
Type: Book
ISBN: 978-1-78560-219-1

Content available
Book part
Publication date: 29 August 2017

Abstract

Details

Advances in Accounting Education: Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-78743-343-4

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