The Experts below are selected from a list of 4068 Experts worldwide ranked by ideXlab platform
Satish Thosar - One of the best experts on this subject based on the ideXlab platform.
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pay for performance incentives in the finance sector and the financial crisis
Managerial Finance, 2017Co-Authors: Sanjiv Jaggia, Satish ThosarAbstract:Purpose - The purpose of this paper is to investigate executive compensation in the finance sector during the periods surrounding the crisis with a view to determining whether compensation incentives were associated with excessive risk taking. Design/methodology/approach - The authors compare pay-for-performance sensitivity (PFPS) parameters for the finance sector before, during, and after the financial crisis. The authors also employ the technology sector as a comparison benchmark. Findings - The authors find that CEO compensation is strongly associated with the accounting-based return on assets performance measure in the finance sector particularly in the pre-crisis period; the relationship is amplified in larger firms. In contrast, the technology sector exhibits PFPS only for the market-based Stockholder return measure with smaller firms displaying greater sensitivity. Originality/value - From a public policy perspective, it is desirable that PFPS for senior executives in the finance sector is muted. This is due to the risk-shifting incentives specific to the sector whereby profits flow to managers/Stockholders while catastrophic losses can be socialized through taxpayer funded bailouts. The findings imply that compensation practices in the finance sector remain a potential concern for systemic stability. In addition to academics and practitioners, the paper may be of interest to financial regulators. In the authors opinion they should consider monitoring PFPS in addition to capital ratios, credit default swap spreads, and other metrics in their risk containment strategies.
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tender offers and target management responses managerial entrenchment versus Stockholder interest revisited
The Financial Review, 1996Co-Authors: Satish ThosarAbstract:Defensive actions by managements facing hostile tender offers have generally been interpreted as entrenchment-oriented behavior. In this paper, longitudinal wealth effects on target firm Stockholders are examined for the 1978-1985 period. The sample of firms where target management resists the tender offer registers significantly higher post-tender offer announcement gains as compared to the sample of firms where target management remains passive. The evidence appears to support the Stockholder interest hypothesis. Copyright 1996 by MIT Press.
Alexander A Voityuk - One of the best experts on this subject based on the ideXlab platform.
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iterative atomic charge partitioning of valence electron density
Journal of Computational Chemistry, 2019Co-Authors: Sergei F Vyboishchikov, Alexander A VoityukAbstract:We propose an atomic charge partitioning scheme, iterative adjusted charge partitioning (I-ACP), belonging to the Stockholder family and based on partitioning of the valence molecular electron density. The method uses a Slater-type weighting factor cA r2n-2 exp(-αA r), where αA is a fixed parameter and cA is determined iteratively. The parameters αA were fitted for 17 main-group elements. The I-ACP scheme is shown to produce consistent, chemically meaningful atomic charges. Several Stockholder-type charge-partitioning are compared. Extensive numerical tests demonstrate that in most cases, I-ACP surpasses most other methods by reproducing more accurately molecular dipole moments. © 2018 Wiley Periodicals, Inc.
Leo E Strine - One of the best experts on this subject based on the ideXlab platform.
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fiduciary principles and delaware corporation law searching for the optimal balance by understanding that the world is not
Social Science Research Network, 2017Co-Authors: Lawrence A Hamermesh, Leo E StrineAbstract:This Chapter, forthcoming in the Oxford Handbook of Fiduciary Law, examines the principles that animate Delaware’s regulation of corporate fiduciaries. Distilled to their core, these principles are to: give fiduciaries the authority to be creative, take chances, and make mistakes so long as their interests are aligned with those who elect them; but, when there is a suspicion that there might be a conflict of interest, use a variety of accountability tools that draw on our traditions of republican democracy and equity to ensure that the Stockholder electorate is protected from unfair exploitation. After reviewing the evolution and institutional setting of the pertinent Delaware case law, the Chapter details how these principles have emerged in several high-salience contexts (the business judgment rule, controller freeze-outs, takeovers, and Stockholder elections), and demonstrates that the identified principles aim to preserve the benefits of profit-increasing activities in a complex business world where purity is by necessity impossible. Further, the Chapter demonstrates that, even when a stricter approach to fiduciary regulation is warranted because of the potential for abuse, these principles hew to our nation’s republican origins and commitment to freedom in another way: when possible to do so, regulation of fiduciary behavior that might involve a conflict of interest should involve not after-the-fact governmental review, but before-the-fact oversight by the fiduciaries of the corporation who are impartial and, most importantly, by the disinterested Stockholders themselves.
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the dangers of denial the need for a clear eyed understanding of the power and accountability structure established by the delaware general corporation law
Social Science Research Network, 2015Co-Authors: Leo E StrineAbstract:There is now a tendency among those who believe that corporations should be more socially responsible to pretend that corporate directors do not have an obligation under Delaware corporate law to make Stockholder welfare the sole end of corporate governance within the limits of their legal discretion. These advocates of corporate social responsibility contend that Delaware directors may subordinate Stockholder welfare to other interests, such as those of the company’s workers or society generally. That is, they do not argue simply that directors may choose to forsake a higher short-term profit if they believe that course of action will best advance the interests of Stockholders in the long run, they argue that directors have no legal obligation to make – within the constraints of positive law – the promotion of Stockholder welfare their end. But, the problem with that argument is that it is inconsistent with both judge-made common law of corporations in Delaware and the design of the Delaware General Corporation Law (“DGCL”).More important, pretending that the nation’s leading corporate law is fundamentally different than it is runs contrary to the goal of ensuring that for-profit corporations behave lawfully, responsibly, and ethically. Lecturing others to do the right thing without acknowledging the rules that apply to their behavior and the power dynamics to which they are subject is not a responsible path to social progress. Rather, it provides an excuse to avoid tougher policy challenges, such as advocating for stronger externality regulation and encouraging institutional investors to exercise their power as Stockholders responsibly. Those challenges must be confronted if we are to ensure that for-profit corporations are vehicles for responsible, sustainable, long-term wealth creation.
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can we do better by ordinary investors a pragmatic reaction to the dueling ideological mythologists of corporate law
Government News, 2014Co-Authors: Leo E StrineAbstract:In his essay, The Myth That Insulating Boards Serves Long-Term Value, Professor Lucian Bebchuk draws a stark dichotomy between so-called “insulation advocates” and proponents of shareholder-driven direct democracy. This Essay begins by rejecting this crude divide between “good” and “evil,” and focuses instead on the practical realities surrounding increases in Stockholder power in an era where there is a “separation of ownership from ownership.” That separation arises because the direct Stockholders of private companies are typically not end-user investors, but instead money managers, such as mutual funds or hedge funds, whose interests as agents are not necessarily aligned with the interests of long-term investors. These practical realities suggest that Bebchuk’s crusade for ever more Stockholder power may not actually be beneficial to ordinary investors, and that his contention — that further empowering Stockholders with short-term investment horizons will not compromise long-term corporate value — is far from proven. This Essay concludes with some thoughts on improvements that could be made in the system that we have. These suggestions are not radical in either direction and they do not involve rolling back the rights of Stockholders. Rather, these suggestions recognize that the fiduciaries who wield direct voting power over corporations should do so in a manner faithful to the best interests of those whose money they control, include proposals to require activist investors to bear some of the costs they impose and to disclose more information about their own incentives so that the electorate can evaluate their motives, and provide incentives that better align the interests of money managers and ordinary investors toward sustainable, sound long-term corporate growth. Taken as a whole, these suggestions would create a more rational accountability system by making all of the fiduciaries for ordinary investors focus more on what really matters for investors, citizens, and our society as a whole — the creation of durable wealth through fundamentally sound economic activity.The article by Lucian Bebchuk to which this article responds — Bebchuk, "The Myth that Insulating Boards Serves Long-Term Value," Columbia Law Review, Volume 113, 2013, pp. 1637-1694 — is available on SSRN at: http://ssrn.com/abstract=2248111
Thomas L Steiner - One of the best experts on this subject based on the ideXlab platform.
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managerial ownership and agency conflicts a nonlinear simultaneous equation analysis of managerial ownership risk taking debt policy and dividend policy
The Financial Review, 1999Co-Authors: Carl R Chen, Thomas L SteinerAbstract:This paper uses a nonlinear simultaneous equation methodology to examine how managerial ownership relates to risk taking, debt policy, and dividend policy. The results have implications for our understanding of agency costs. We find risk to be a significant and positive determinant of the level of managerial ownership while managerial ownership is also a significant and positive determinant of the level of risk. The result supports the argument that managerial ownership helps to resolve the agency conflicts between external Stockholders and managers but at the expense of exacerbating the agency conflict between Stockholders and bondholders. We further observe evidence of substitution-monitoring effects between managerial ownership and debt policy, between managerial ownership and dividend policy, and between managerial ownership and institutional ownership.
Andrew C. Wicks - One of the best experts on this subject based on the ideXlab platform.
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getting real stakeholder theory managerial practice and the general irrelevance of fiduciary duties owed to shareholders
Business Ethics Quarterly, 1999Co-Authors: Richard Marens, Andrew C. WicksAbstract:Stakeholder theorists have generally misunderstood the nature and ramifications of the fiduciary responsibilities that corporate directors owe their Stockholders. This fiduciary duty requires the exercise of care, loyalty, and honesty with regard to the financial interests of Stockholders. Such obligations do not conflict with the normative goals of stakeholder theory, nor, after a century of case law that includes Dodge Bros. v. Ford, do fiduciary responsibilities owed shareholders prevent managerial policies that are generous or sensitive to other corporate stakeholders. The common law recognizes a multitude of legal relationships between various corporate constituents, and fiduciary duties are only a subset of the obligations that arise from these relationships. This article argues that statute and case law can bring comparable legal protection to constituents other than Stockholders, and suggests ways that these protections might be further strengthened. Implications for management education are also discussed.
