Search Results (13)

This research empirically investigates how the adoption of restricted stock units (RSUs) affects earnings per share (EPS) and operating profit, focusing on variations across industries. RSUs have emerged as a strategic compensation tool for promoting alignment between employee interests and long-term organizational objectives, while overcoming the short-sighted focus typically associated with conventional stock options. However, previous studies have mainly focused on analyzing the average effect of RSU or verifying only whether there is a short-term improvement in performance after its introduction, and there has been no sufficient review of the long-term effects. In addition, there is a lack of analyses on how the effects of RSU differ by industry. To fill this research gap, this study applied hierarchical regression analysis to S&P 500 company data from 1997 to 2023 to compare and analyze the differential effects of RSU by industry. The analysis showed that the EPS and operating income were only significantly affected by some industries in the early stages of RSU introduction, but the EPS and operating income were significantly improved in all industries in the long term. In addition, it was confirmed that the effects of RSU differ depending on the characteristics of the industry. This study empirically verifies the long-term effects of RSU and the differences by industry, offering practical insights for executives and shareholders when utilizing RSUs as a forward-looking compensation mechanism that fosters sustainable performance and enduring corporate value. Full article

This study examines whether Chief Executive Officers (CEOs) exercise a greater proportion of their exercisable options in response to firm-specific stock price bubbles. For a sample of U.S. firms from 1992 to 2021, the study identifies stock price bubble periods using the Generalized Sup Augmented Dickey-Fuller (GSADF) method. A bubble is a statistical measure that detects an ex-post firm-specific stock price exuberance that creates abnormally high variation in stock prices arising from changes in discount rates, R&D and market liquidity. If executives have private information and can infer firm-specific bubbles, they are likely to exercise a greater proportion of their exercisable stock options during bubbles to benefit from their firms’ stock price exuberance. Using data aggregated at the CEO-year level, we find that executives are prone to exercising a larger portion of their vested stock options during market bubbles, with the aim of monetizing on the exuberance in the firm’s stock price. They leverage their expertise and their acquired price-sensitive private information to identify these bubbles. We also find that CEOs’ option exercise activity increases as the duration of the bubble increases to capture the price momentum. Full article

This study explores the determinants of CEO compensation in the banking sector, focusing on cross-listing and loan growth. Using 8800 observations from 45 countries spanning 2004 to 2018, the analysis reveals significant differences in compensation structures between developed and developing economies. The findings show that CEO stock options and restricted stock compensation are positively correlated with cross-listing in the U.S. market, with a stronger effect in developing countries. Loan growth is associated with higher incentive-based pay but lower fixed salaries, aligning CEO compensation with performance-driven growth and risk management. These results underscore the role of regulatory environments and institutional quality in shaping executive pay, offering valuable insights for policymakers, financial institutions, and investors navigating a globalized banking sector. Full article

Restricted stock units (RSUs) are a key component of executive compensation schemes, aligning executive incentives with the long-term goals of the company and compensating for the limitations of traditional stock options. This study empirically analyzes the impact of RSUs on corporate performance, particularly earnings per share (EPS) and operating profit. S&P 500 companies’ 27 years of data from 1997 to 2023 were used to evaluate the change in performance before and after the introduction of RSUs, and a paired t-test and hierarchical regression analysis were applied. The research results show that the introduction of RSUs has a stronger performance improvement effect in the 6th to 10th year after the introduction, suggesting that over time, even if RSUs cause short-term cost burdens, they increase the company’s financial stability in the long term and contribute to sustainable growth. In addition, the same analysis was conducted by setting not only EPS but also operating profit as an alternative variable, and it was confirmed that RSUs also have a positive impact on actual profitability improvement. This study emphasizes the need for companies to design RSUs as a strategic compensation system for long-term value creation, not as a short-term performance reward, and suggests the need for a further analysis of the effects of RSUs in various industries and regions. Full article

Executive compensation contracts may influence financial reporting quality, and the CFO plays a key role in preparing the financial statements. This study examines whether the structure and components of CFO compensation are associated with audit risk as measured by audit fees for a sample of S&P 1500 companies during the period 2012–2022. We find that the percentage of total compensation composed of either stock or options is significant and positively related to audit fees, while non-equity incentive plan compensation is significant and negatively related to audit fees. We also find that the dollar amount of equity compensation is significant and positively related to audit fees, while the dollar amount of non-equity compensation is not related to audit fees. These results suggest that CFO compensation structure is an important factor in the assessment of audit risk, which is important for compensation committees as well as regulators. This is the first study, to our knowledge, that examines the relationship between the dollar amount and composition of CFO compensation and audit fees. Full article

Background: The use of reverse shoulder arthroplasty as a primary and revision implant is increasing. Advances in implant design and preoperative surgical planning allow the management of complex glenoid defects. As the demand for treating severe bone loss increases, custom allograft composites are needed to match the premorbid anatomy. Baseplate composite structural allografts are used in patients with eccentric and centric defects to restore the glenoid joint line. Preserving bone stock is important in younger patients where a revision surgery is expected. The aim of this article is to present the assessment, planning, and indications of femoral head allografting for bony defects of the glenoid. Methods: The preoperative surgical planning and the surgical technique to execute the plan with a baseplate composite graft are detailed. The preliminary clinical and radiological results of 29 shoulders which have undergone this graft planning and surgical technique are discussed. Clinical outcomes included visual analogue score of pain (VAS), American Shoulder and Elbow Surgeons score (ASES), Constant–Murley score (CS), satisfaction before and after operation, and active range of motion. Radiological outcomes included graft healing and presence of osteolysis or loosening. Results: The use of composite grafts in this series has shown excellent clinical outcomes, with an overall graft complication rate in complex bone loss cases of 8%. Conclusion: Femoral head structural allografting is a valid and viable surgical option for glenoid bone defects in reverse shoulder arthroplasty. Full article

It is well known that a large part of the existing European building stock needs to be renovated to increase structural and energy performance. Unfortunately, deep renovations come with high initial costs, and therefore, owners and real estate developers often prefer complete demolition and reconstruction. Both options depend on specific factors, and to select which option could be the closest to the optimal scenario, it is necessary to evaluate all environmental, social, and economic indicators. Life Cycle Analysis is of great significance to evaluate building sustainability, in particular through the comparison between different design alternatives. However, the life cycle impacts of the construction stage depend on selected materials and technologies that can be subject to change during the subsequent stages of the design process, i.e., moving from preliminary design to detailed design and execution plans. With the aim of understanding the role of LCA during the design process, the case study of “ProGETonE—Proactive Synergy of Integrated Efficient Technologies on Buildings’ Envelopes” has been addressed, leading to the observation that the impacts, in particular the global warming potential (GWP), raised significantly. Building Information Modelling (BIM) helped the information sharing and management of this project, which consists of the deep renovation and architectural reshaping of an existing student residence through the construction of integrated façade systems. Full article

The Sarbanes–Oxley Act of 2002 (SOX) imposed stringent requirements on corporate executives to hold them more accountable for their management decisions. This act has ramifications for executive pay as well. This study investigates the lessening effects of SOX on the association between executive compensation and cost of equity capital. The regression analyses are based on 11,649 firm-year observations of publicly listed companies in the United States from 1998 to 2014. The results show that bonuses and shareholdings are associated with a lower cost of equity capital, while the stock options are not related to the cost of equity capital. In addition, the findings indicate that SOX weakens the association between the cost of equity capital and executive bonuses, stock options for all top five executives. However, SOX lessens the association between the cost of equity capital and shareholdings, only for the three non-CEO and non-CFO executives. This is the first study to investigate how the change in regulatory environment invoked by SOX impacts the association between executive compensation and cost of equity capital. Moreover, this study examines the impacts on all top five highly paid executives and focuses on the three components of executive compensation that are involved with SOX. Full article

The aim of this research is to explore the determinants of airline CSR. Stakeholder theory is the theoretical underpinning. Chief executive officers (CEOs) are the research target, which is theoretically underpinned by upper echelon theory. For data collection, this study used data from COMPUSTAT, EXECUCOMP, KLD MSCI, LinkedIn, and the Bureau of Economic Analysis. Standard industry classification code 4512 was employed to obtain information on airline companies. Moreover, the number of observations was 154, the number of firms was 15, and the study period was 1999–2016. CSR domains include employment, the environment, and the product. The explanatory attributes are the CEO’s age, tenure, education, share ownership, stock option, and duality. Ordinary least squares and feasible generalized least squares regression analyses were executed for hypothesis testing. Regarding the results, employment CSR was positively affected by CEO age. This study found an inverted U-shaped relationship between CEO tenure and environmental CSR. Environmental CSR was also negatively influenced by stock options. Product CSR was positively associated with CEO age, whereas it was negatively associated with CEO duality. Full article

We examine the role of employee stock option plans (ESOPs) in mitigating agency problems in New Zealand firms. We find that ESOPs have a significant and positive effect on firm performance relative to their non-ESOP counterparts. This relation appears within a year from the first ESOP announcement, and for two to four years after the announcement. Our results show that ESOPs improve corporate performance by 10 times the cost of the ESOPs’ adoption in the first year of issue. The improvement persists for four years after the first issuance. These findings confirm the effectiveness of employee stock option plans for companies issuing ESOPs compared with companies that do not issue ESOPs, and show how much the value creation of ESOPs contributes to these firms. Full article

Since executive stock options may give rent-seeking incentives to CEOs, CEOs with stock options are likely to misallocate corporate resources to seek personal gains, which in turn may lead to a decrease in firm value. High-quality audit services can reduce the negative impacts of executive stock options on firm value and help firms to ensure sustainable growth. However, while most of the existing accounting literature related to executive stock options (ESO) is mainly focused on earnings management, there are relatively few studies that investigate the relation between ESO and audit fees. At the same time, while previous studies on ESO have been conducted in advanced countries, few studies have identified the relationship between ESO and audit fees in emerging markets. Therefore, it is necessary to examine the effect of ESO under circumstances different from those of developed countries. To fill this gap, we investigated the association between executive stock options and audit fees and examine the moderating effects of agency problems and monitoring systems on the relationship. Using 462 observations from 110 nonfinancial Korean listed companies, for the period of 2000 to 2005, we found that executive stock options are positively related to audit fees. In addition, we found that the effects of executive stock options on audit fees are even higher in firms with high agency problems, effective internal monitoring systems, and major accounting firms. This study can help regulatory agencies to validate audit fee regulations, such as the International Standard on Auditing, that consider ESO a significant risk factor. In addition, these results can help external auditors to set up the specific guidelines for pricing audit fees. Furthermore, the results of this study will contribute to the construction of more desirable corporate governance structure in Korean companies, which in turn would not only enhance firm value but also strengthen the sustainability of companies belonging to the emerging markets. Full article

The increasing probability of Taxus baccata (L.) decline given climate change brings forth many uncertainties for conservation management decisions. In this article, the authors present the effects of applying regeneration cuttings since the year 2000 on the viability of the understory yew population. By collecting data from a stand located at the centre of the largest population of European yew in Slovakia, containing approximately 160,000 individuals, and analysing tree-ring records from 38 sampled trees, the improved performance of yews, including stem growth, seed production, and number of regenerated individuals, was revealed. Thinning the canopy by removing 15% of the growing stock volume per decade, combined with the subsequent irregular shelterwood cuttings, was assessed as a useful strategy. Moreover, lower radial growth of females compared to males, but simultaneously their similar response to climate, suggests a possible trade-off between reproduction and growth. Release cuttings of up to 30% of the standing volume in the vicinity of the female trees, executed in the rainy summers following warmer winters, and consistent elimination of deer browsing, can further enhance the positive effects of applied cuts on yew viability. Overall, the suggested active measures could be considered as an effective option to preserve the unique biodiversity of calcareous beech-dominated forests in Central Europe. Full article

Cost-Benefit Analysis (CBA) is often employed to inform decision makers about the desirability of transport infrastructure investment options. One of the main limitations of traditional CBA approaches is that they do not provide a dynamic view that explicitly illustrates the cost and benefit relationships between component entities over time. This paper addresses this issue by describing a System Dynamics (SD) approach that can perform transport infrastructure CBA through the application of systems thinking to develop a causal-loop model that can subsequently be operationalised into an executable stock-and-flow model. Execution of this model readily enables sensitivity analysis of infrastructure investment options and visualisation of the cost-benefit behaviour of each variant over time. The utility of the approach is illustrated through a case study, the Co Chien Bridge project in Vietnam, using a model that incorporates conventional economic metrics and factors that measure indirect project benefits, such as impact on gross domestic product, unemployment rate, and total taxes gained from affected economic sectors. Full article