Showing papers on "Remuneration published in 2006"

Clean Evidence on Peer Effects

Abstract: We study subjects who were asked to fill letters into envelopes with a remuneration independent of output. In the “pair” treatment, two subjects worked at the same time in the same room, and peer effects were possible. In the “single” treatment, subjects worked alone, and peer effects were ruled out. We find evidence of peer effects in the pair treatment because the standard deviations of output are smaller within pairs than between pairs. Moreover, average output is higher in the pair treatment: thus, peer effects raise productivity. Finally, low‐productivity workers are the most sensitive to the behavior of peers.

The burden of celebrity: the impact of ceo certification contests on ceo pay and performance

Abstract: We used the results from Financial World’s widely publicized certification contest, CEO of the Year, to investigate the impact of such contests on firm performance and executive compensation. A certification contest ranks actors on performance criteria that key stakeholders accept as credible and legitimate. We found that certified CEOs received higher compensation than noncertified CEOs when performance was high but lower remuneration when performance was poor. Although certifications appear to generate positive abnormal returns when they are first announced, the longer-term impact of CEO certifications appears to be negative.

A New Approach to CSR: Company Stakeholder Responsibility

Abstract: Assume that the CEO of Firm A is asked the following: ‘Well, I know that your company makes products that consumers like, and that those products make their lives better. And I know that suppliers want to do business with your company because they benefit from this business relationship. I also know that employees really want to work for your company, and are satisfied with their remuneration and professional development. And, let’s not forget that you’re a good citizen in the communities where you are located;2 among other things, you pay taxes on the profits you make. You compete hard but fairly. You also make an attractive return on capital for shareholders and other financiers. However, are you socially responsible?’

Australian chief executive officer remuneration: pay and performance

Abstract: International studies document strong evidence that chief executive officer (CEO) remuneration is positively correlated with corporate performance. Prior Australian studies, however, find no positive link between CEO pay and market performance. In the present paper we re-examine the association between Australian CEO remuneration and firm performance using standard empirical models from the international literature. We find that in every respect the Australian evidence is consistent with international findings for firms of the USA, UK and Canada. In particular, we document CEO pay‐performance association as positive and statistically significant.

Directors' remuneration, firm's performance and corporate governance in Malaysia among distressed companies

Abstract: Purpose – The purpose of this study is to investigate the extent to which firm's performance, the structure of the board of directors and ownership determine directors' remuneration in Malaysia among distressed firms.Design/methodology/approach – The study uses publicly available data from a sample of 86 distressed firms and matched 86 non‐distressed firms for 2001 financial year.Findings – The findings for the full sample show that directors' remuneration is not associated with firm's profitability, as measured by ROA. A negative and significant association is observed between directors' remuneration and lagged ROA. With regard to corporate governance, board independence and the extent of non‐executive directors' interests are found to have negative influence on directors' remuneration. In addition, findings also reveal directors' remuneration is positively associated with firm's growth and size. In sub‐sample analyses, a strong negative relation is observed between ROA and directors' remuneration for he...

Cultural impact on Chinese corporate disclosure – a corporate governance perspective

Abstract: Purpose – The purpose of this preliminary study is to explore the impact of changed cultural environment on the voluntary disclosure behaviour of Chinese listed companies.Design/methodology/approach – A theoretical framework of the relationship between corporate disclosure and governance forms the basis of the research. A composite checklist of corporate disclosure was developed using relevant corporate governance indices and analyses were carried out on the 2003 financial reports of 120 Chinese listed companies. Six areas of voluntary disclosure of the sample companies were analysed and reported. These areas are: board structure and functioning, employees related issues, director remuneration, audit committee, related party transactions and stakeholder interest.Findings – The results suggest that as China's cultural and social norms change, there was willingness of Chinese listed companies to provide voluntary information in addition to the disclosure requirements. Information relating to stakeholder int...

Public versus Private Health Care in a National Health Service

Abstract: This paper studies the interaction between public and private health care provision in a National Health Service (NHS), with free public care and costly private care. The health authority decides whether or not to allow private provision and sets the public sector remuneration. The physicians allocate their time (effort) in the public and (if allowed) in the private sector based on the public wage income and the private sector profits. We show that allowing physician dual practice crowds out public provision, and results in lower overall health care provision. While the health authority can mitigate this effect by offering a higher wage, we find that a ban on dual practice is more efficient if private sector competition is weak and public and private care are sufficiently close substitutes. On the other hand, if private sector competition is sufficiently hard, a mixed system, with physician dual practice, is always preferable to a pure NHS system.

Directors' Remuneration and Performance in Australian Banking

Abstract: This paper explores the relationship between directors’ and Chief Executive Officers’ pay and performance within Australian banking, using panel data for the 1992-2005 period. Several earnings models are estimated, using different dependent variables, alternate measures of performance and different estimation techniques. The results indicate an absence of a contemporaneous relationship between directors’ pay and firm performance, and no association with prior year performance. However, there is a more distant pay-performance relationship, with total directors’ pay having a robust positive association with earnings per share lagged two years, as well as with ROE lagged two years. The other key determinants of directors’ pay in Australian banking are bank specific managerial policies, lags in the administration of pay, bank size, directors’ age and directors’ stock ownership. In contrast to total directors’ pay, the evidence confirms a strong positive and direct association between CEO remuneration and prior year bank performance. The pay-performance association is stronger and more direct for CEO remuneration than it is for total directors’ remuneration. The responsiveness of CEO pay with respect to bank performance appears to have increased over time.

How to best ensure remuneration for creators in the market for music? Copyright and its alternatives

Abstract: The focus of this essay is to examine the market for copyrighted works with a particular emphasis on the sound recording market. This market is currently in a state of flux, some would say disarray, due to the ability of the Internet to lower transmission costs for both authorized and unauthorized copies, with the latter being, at this time, far more prevalent. In this essay we discuss the intent of copyright, the role of copying and file-sharing, and some alternative production/consumption schemes meant to strengthen or to replace copyright.

Evaluating the Characteristics of Corporate Boards Associated with Layoff Decisions

Abstract: The paper evaluates the characteristics of corporate boards associated with layoff decisions using a large sample of UK firms suffering performance declines over the period 1994–2003. The results show that firms are less likely to respond to performance declines with employee layoffs when they have large boards. Further analysis shows that layoff decisions are positively associated with the proportion of outside directors and directors’ remuneration. The findings provide some support to the recommendations of the Cadbury Report (1992) and Higgs Review (2003) on the importance of the structure and composition of board of directors in the corporate governance process.

On capital structure, risk sharing and capital adequacy in islamic banks

Abstract: Islamic banks do not pay interest on customers' deposit accounts. Instead, customers' funds are placed in profit-sharing investment accounts (PSIA). Under this arrangement, the returns to the bank's customers are their pro-rata shares of the returns on the assets in which their funds are invested, and if these returns are negative so are the returns to the customers. The bank is entitled to a contractually agreed share of positive returns (profits) as remuneration for its work as asset manager; however, if the returns are zero or negative, the bank receives no remuneration but does not share in any loss. In the case of Unrestricted PSIA, the investment account holders' funds are invested (i.e., commingled) in the bank's asset pool together with the bank's shareholders' own funds and the funds of current account holders. In that case, the bank's own funds that are invested in the asset pool are treated the same as those of Unrestricted PSIA holders for profit and loss sharing purposes; however, the shareholders also receive as part of their profit the remuneration earned by the bank as asset manager (less certain expenses not chargeable to the PSIA holders). This remuneration (management fees) represents an important source of revenue and profits for Islamic banks. From a capital market perspective, this arrangement presents an apparent anomaly, as follows: shareholders and Unrestricted PSIA holders share the same asset risk on the commingled funds, but shareholders enjoy higher returns because of the management fees. On the other hand, competitive pressure may induce the bank to forgo some of its management fees in order to pay a competitive return to its PSIA holders. In this way, some of the PSIA holders' asset risk is absorbed by the shareholders. This phenomenon has been termed "displaced commercial risk" [2]. This paper analyzes this phenomenon. We argue that, in principle, displaced commercial risk is potentially an efficient and value-creating means of sharing risks between two classes of investor with different risk diversification capabilities and preferences: wealthy shareholders who are potentially well diversified, and less wealthy PSIA holders who are not. In practice, however, Islamic banks set up reserves with the intention of minimizing any need to forgo management fees.

Workforce issues in nursing in Queensland: 2001 and 2004

Abstract: Aims and objectives. The aim of the study was to identify the factors having an impact upon nursing work and to use the results to inform strategic planning of the Queensland Nurses Union. Background. In 2001 and 2004, a study was undertaken to gather data on the level of satisfaction of nurses with their working life. This paper reports the 2004 results on workload, skill mix, remuneration and morale. Where applicable, the results are compared with 2001 data. Methods. A questionnaire was mailed to 3000 Assistants-in-Nursing, Enrolled and Registered Nurses in October 2004. All participants were members of the Queensland Nurses Union. The results are reported in three sectors - public, private and aged care. A total of 1349 nurses responded to the survey, a response rate of 45%. Results. Nurses in the 2004 study believed: their workload was heavy; their skills and experience poorly rewarded; work stress was high; morale was perceived to be poor and, similar to 2001, deteriorating; the skill mix was often inadequate; and the majority of nurses were unable to complete their work in the time available. Nursing morale was found to be associated with autonomy, workplace equipment, workplace safety, teamwork, work stress, the physical demand of nursing work, workload, rewards for skills and experience, career prospects, status of nursing and remuneration. Conclusions. Overall the findings of the study are consistent with those determined by the 2001 survey. Relevance to clinical practice. The findings of this study indicate the importance of factors such as workplace autonomy, teamwork, the levels of workplace stress, workload and remuneration on nursing morale. The data also indicate that workplace safety and workplace morale are linked. These findings provide information for policy makers and nurse managers on areas that need to be addressed to retain nurses within aged care, acute hospital and community nursing.

Evaluation of Researchers: A Life Cycle Analysis of German Academic Economists

Abstract: In this paper we argue that any meaningful bibliometric evaluation of researchers needs to take into account that research productivity follows distinct life cycles. Using an encompassing data set portraying the research behavior of German academic economists, we first show that research productivity crucially depends on career age and vintage. Based on the identified effects, we develop a simple formula that shows how a researcher's performance compares to that of his or her peers. This kind of information may serve as an input for performance-related remuneration and track-record-based allocation of research grants. We then go on to investigate the persistence of individual productivity. The Persistence issue is of special importance in the academic labor market because of the irrevocable nature of tenure. Finally, we show how life cycle considerations can be used in evaluations of university departments in order to render the resulting rankings insensitive to the age structure of the evaluated faculties.

How are health professionals earning their living in Malawi

Abstract: The migration of health professionals from southern Africa to developed nations is negatively affecting the delivery of health care services in the source countries. Oftentimes however, it is the reasons for the out-migration that have been described in the literature. The work and domestic situations of those health professionals continuing to serve in their posts have not been adequately studied. The present study utilized a qualitative data collection and analysis method. This was achieved through focus group discussions and in-depth interviews with health professionals and administrators to determine the challenges they face and the coping systems they resort to and the perceptions towards those coping methods. Health professionals identified the following as some of the challenges there faced: inequitable and poor remuneration, overwhelming responsibilities with limited resources, lack of a stimulating work environment, inadequate supervision, poor access to continued professionals training, limited career progression, lack of transparent recruitment and discriminatory remuneration. When asked what kept them still working in Malawi when the pressures to emigrate were there, the following were some of the ways the health professionals mentioned as useful for earning extra income to support their families: working in rural areas where life was perceived to be cheaper, working closer to home village so as to run farms, stealing drugs from health facilities, having more than one job, running small to medium scale businesses. Health professionals would also minimize expenditure by missing meals and walking to work. Many health professionals in Malawi experience overly challenging environments. In order to survive some are involved in ethically and legally questionable activities such as receiving "gifts" from patients and pilfering drugs. The efforts by the Malawi government and the international community to retain health workers in Malawi are recognized. There is however need to evaluate of these human resources-retaining measures are having the desired effects.

Chief executive officer remuneration disclosure quality: corporate responses to an evolving disclosure environment

Abstract: We examine chief executive officer remuneration disclosure in Australia from 1998 to 2004. Disclosure was first required by the Company Law Review Act 1998 (CLRA98). Despite CLRA98's clear intentions, firms generally failed to comply until the requirements were formalized by Director and Executive Disclosures by Disclosing Entities (AASB1046), issued in 2004. For a sample of 124 firms, we find significant improvements in disclosure concurrent both with CLRA98 and AASB1046. We also find firm size, corporate governance, auditor quality, cross-listing status and public scrutiny to be significant explanations of disclosure. Our results indicate that high quality disclosures will only come about through detailed, black letter requirements and that principle-based legislation involving interpretative discretion is unlikely to produce the desired level of disclosure.

Returns to Race: Labour Market Discrimination in Post-Apartheid South Africa

Abstract: This paper empirically assesses the impact of post-1994 policy making on racial discrimination in the South African labour market. The post-apartheid government has implemented a series of remedial measures, including an ambitious set of black empowerment and affirmative action policies. The first part of the paper gives an overview of the South African labour market post-1994 and the most important legislation, regulations and other measures aimed at redressing the inequalities of the past. We then argue that some assessment of whether the aims of these measures are being achieved is necessary. The empirical part of the paper employs the decomposition techniques of Oaxaca (1973) and Blinder (1973), Brown, Moon and Zoloth (1980) and Juhn, Murphy and Pierce (1991, 1993) to analyse three stages of the employment process: employment, occupational attainment and wage determination. Fifteen nationally representative household surveys are used to compare the evolution of discriminatory hiring and remuneration practices between 1995 and 2004 and across population groups. The results suggest that affirmative action policies have had no observable effect on the racial employment gap, and its impact on the wage distribution is limited to a small narrowing of wages at the top of the wage distribution. There appears to have been a shift away from “pure discrimination” and towards differential returns to education, which is consistent with an increasingly important role for the quality of education in labour market outcomes.

Learning the Master's Trade: Apprenticeship and Human Capital in Ghana

Abstract: This paper explores the institution of apprenticeship in Ghana. A model is presented where apprenticeship training is idiosyncratic, increasing an individual's productivity in the current firm, but not in any other firm. Still, individuals are willing to fund apprenticeships as they can reap the returns to the specific training of apprenticeship if they manage to acquire the capital required to start their own firms, and replicate the technology and business practice of the apprenticeship firm. Predictions of the model for the productivity and remuneration of different workers are developed and tested using both a linked employer-employee survey of manufacturing firms, and a national household survey.

The Fundamentals of Minimum Wage Fixing

Abstract: This manual draws on the ILO's comprehensive database containing the principal legal provisions and minimum wage fixing mechanisms in 100 countries. The minimum wage has had a long and turbulent history, and this study sheds light on its intricacies by providing a thorough overview of the institutions and practices in different countries. It outlines the main topics for debate concerning the effects of minimum wages on major social and economic variables such as employment, wage inequality, and poverty. The book considers the various procedures countries use for implementation, including the criteria employed to fix the minimum wage, and how they are linked to specific country objectives. It then measures the efficiency of the minimum wage, and focuses on its impact on employment as a major political issue. For the benefit of non-specialists, the validity of econometric models and their results are examined.

The revised Combined Code and corporate governance

Abstract: Purpose – The purpose of this paper is to investigate the extent to which a sample of large UK companies comply with the main provisions of the revised 2003 Combined Code on corporate governance. The new Code incorporates a number of key principles of compliance with regard to the roles of a company's chairperson and chief executive, the composition of its Board of Directors and the composition of the Board's three main committees – the Nominations, Remuneration and Audit Committees. Companies are expected to fully comply with the provisions of the Code or proffer an “acceptable” explanation as to why they have not done so under the Code's “comply or explain” philosophy. The Code gives greater prominence to the role of non‐executive directors in a company's corporate governance structures and decision‐making processes and emphasizes the importance of non‐executive directors being “independent”.Design/methodology/approach – The paper looks at the extent of compliance in respect of the governance provisions...

The Impact of Merger Activity on Executive Pay in the United Kingdom

Abstract: We examine the impact of mergers and acquisitions on the remuneration of CEOs in the UK from 1981 to 1996. We find that CEO pay is not strongly related to company performance. In contrast, increases in firm size do have a significant impact. There is also evidence that acquisitions offer CEOs the scope to influence their pay positively. We also note however that CEOs engaging in 'wealth-reducing' acquisitions experience significantly lower remuneration than their counterparts whose deals meet with market approval. This result suggests that shareholder-principals have at least some success in penalizing managers for unwarranted, empire-building, mergers.

Online multimedia file distribution system and method

Abstract: An online multimedia file distribution system and method applying a brokerage exchange model to peer-to-peer networks to thereby deliver a secure exchange of digital multimedia files between users and/or clients while providing payment, payment receipt and remuneration of the entity having ownership interest in the multimedia, digital rights management, and search functions.

Bidder CEO and Other Executive Compensation in UK M&As

Abstract: This paper investigates the impact of M&As on bidder (CEO and other) executive compensation employing a unique sample of 100 completed bids in the UK over the 1998‐2001 period. Our findings indicate that less independent and larger boards award CEOs significantly higher bonuses and salary following M&A completion both for the full sample and for the UK and US sub-samples. UK CEOs and executives are rewarded more for the effort exerted in accomplishing intra-industry or large mergers than for diversifying or small mergers and their cash pay is unaffected by other measures of their managerial skill or performance. US bidders are rewarded at higher levels than their UK counterparts and their remuneration is related only to measures of CEO dominance over the board of directors. Overall our findings offer support for the managerial power rather than the agency theory perspective on managerial compensation.

Invest or divest? : On the relative improvement potential in outsourcing manufacturing

Abstract: This dissertation aims to contribute to the discourse on the future of manufacturing in Sweden. It is argued that the real threat does not come from lower wages in Eastern Europe and Asia. Rather it comes from an inability to make the most of existing manufacturing systems. The joint contribution of the underlying studies that this dissertation is based on provides compelling support for corroborating this line of thought. More important, however, is that in addition to showing that there is room for improvement, a lot of input is provided on how to act creatively for enhanced performance. The discussion on how to act mainly focuses on three research issues. First, enhancing continuous improvement capability. The continuous improvement abilities considered most important for Swedish manufacturers to develop are pointed out. That is, the ability to adopt a systematic and strategic approach to continuous improvements, the ability to lead the way towards continuous improvements, and finally the ability to involve customers and suppliers in continuous improvements. Furthermore, the likely positive performance impact of accomplishing this is clarified. Second, adopting the principles of lean manufacturing. Rather than reinforcing Taylorism, it is shown that lean manufacturing seems to contribute to the creation of sustainable work systems in Sweden. However, a broad process of change awaits the many companies that might aspire to transform their operations in this direction. In order to reap the full potential of this strategy, the work organisation, as well as management accounting and remuneration systems, must change, not only manufacturing processes. Third and finally, making more effective outsourcing decisions. It is shown that any positive effects of outsourcing manufacturing are more likely to be realized if concurrent initiatives are taken to develop the capability of the manufacturing function. The analysis also indicates a potential for taking a more strategic approach to outsourcing, i.e., outsourcing in order to increase focus on core manufacturing activities and take advantage of the supplier’s higher innovation capability. Moreover, a potential for selecting suppliers more appropriately is also indicated, such as by trying to achieve greater economies of scale. The chosen methodological approach has been to combine two large-scale surveys of representative samples of Swedish engineering industry companies with two multiple case studies. The surveys measured continuous improvement behaviours, lean manufacturing and outsourcing, and provides descriptive statistics as well as tests of theoretical assumptions. The case studies provide a deeper understanding of researched issues. One was designed to illustrate how the Balanced Scorecard may enhance the continuous improvement capability level, and the other, to hearing some voices of the empirical field.

An Introduction to Human Resource Management

Abstract: PART 1 The role of human resource management 1 Introduction to human resource management 2 Human resource planning and resourcing 3 Work and job design PART 2 Acquiring and rewarding staff 4 Recruiting the right people 5 Selecting the right people 6 Remuneration and reward PART 3 Developing people 7 Learning, training and development 8 Managing and developing performance 9 Employee relations, participation and involvement PART 4 Effective human resource management 10 Health, safety and employee well-being 11 Equal opportunities and managing diversity 12 Strategic human resource management 13 Current issues and new developments

Insider Trading and Pay Performance Sensitivity: An Empirical Analysis

Abstract: We examine whether the sensitivity of pay to performance is associated with the amount of insider trading that managers undertake. Because insider trading profits represent an alternative form of compensation, we expect that firms will consider the compensation component provided by insider trading when designing remuneration contracts. Employing a proxy for insider trading that captures the degree to which managers trade on private information, we find evidence that an increased (a decreased) level of insider trading is associated with a decreased (an increased) pay performance sensitivity.

The importance of reputation in awarding public contracts

Abstract: *: The main economic literature emphasizes that the efficiency of the awarding procedure depends on the contractual rules, especially those regarding firm's remuneration. In this work we show the existence of a reverse link: when the enforcement of contractual terms is imperfect, the rules of the awarding mechanism can help to improve the efficiency of the contractual relationship. In some circumstances, awarding rules based only on bids are not able to deal with the problem of opportunistic behaviour during the execution of the contract. Our model points out that the public administration can incentivize the contractor's fairness by considering not only competitors' bids, but also their different reputation.

Treatment intensity and provider remuneration : dentists in the British National Health Service

Abstract: Dental service providers in the British National Health Service (NHS) operate under a number of remuneration arrangements that give rise to different incentives. Using data derived from the Scottish dental system, we examine the relationships between remuneration, patient exemption status and treatment intensity. After controlling for differences in patient need and dentist-specific preferences, we find that self-employed dentists treat patients who are exempt from payment more intensively than their salaried counterparts. The results imply that changes in remuneration can have a large effect on the distribution of treatments. More generally, our results provide support for economic models that view financial incentives as important determinants of physician behaviour.