Linking CEO pay to firm performance: empirical evidence from the electric utility industry
Article Abstract:
Keywords: Accounting research, Performance-related pay, CNef executives, Organizational performance, Electricity industry, USA This study simultaneously investigates the association between a broad spectrum of firm performance measures and CEO compensation components. We focus on the electric utility industry because of its unique institutional setting and the continued market dominance by a few firms, despite the much heralded deregulation in this industry. Results for a cross-sectional investigation of 225 firm-year observations reveals that there is a positive association between changes in compensation and changes in firm performance. In particular, changes in bonus are associated with changes in market returns, and changes in stock options are related to changes in sales growth. We interpret the latter finding as reflecting the stockholders' desire to reward executives who get rate increases approved from the regulatory commissions.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 2000
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Politicians' motives in the rent seeking society
Article Abstract:
Keywords: Politics, Motivation, Legislation Why do politicians vote for pork barrel projects and wealth transfers which comprise a negative sum game for society? I examine four possible motives (electoral necessity, constituent preferences, personal financial gain, nonfinancial personal gain) and illustrate the consequences of motive for proposals to reform the rent seeking society. Term limits, for instance, are likely to be ineffective if rent seeking is primarily due to the necessity of raising resources to win elections. I also discuss how the various motives might be distinguished in practice.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 2000
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Politicians' motives in the rent seeking society
Article Abstract:
The relation of four possible legislators' motives for three reforms, namely term limits for legislators, campaign finance reform and the presidential item veto, is analyzed. The four motivations for politicians are: electoral necessity, constituent preferences, personal financial gain and personal nonfinancial gain. These motives differ from other explanations of politicians' votes for pork barrel projects. It is suggested that the typology of motives allows the integration of arguments for or against the reforms.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1999
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