Acquisition related benefits paid to CEOs of targeted companies as part of takeover deals are relatively prevalent and as such a US study sought to examine the bonuses paid to CEOs of targeted companies during acquisitions to better understand the implications for shareholders. Primarily the researchers looked to determine if merger bonuses paid to target CEOs facilitate a wealth transfer from shareholders of the target company to those of the acquiring company. The results found this not to be the case, and that bidders fair worse in deals with such bonuses, despite the finding that they pay lower acquisition premiums.
Key Topics: Mergers and acquisitions; Merger bonus
CEO compensation is often seen, at least by the public, as too high and out of touch with the compensation of common workers. A study at Louisiana State University investigated the pay dispersion relationship between CEO compensation and general employee compensation across 54 countries by examining the role of informal and formal country-level institutions of social power structures, such as level of country development, strength of collective labor rights, and supply and demand market forces. Analysis found that a number of these structures effect CEO and employee compensation, as well as pay dispersion.
Key Topics: CEO compensation; Pay dispersion
Against the backdrop of increasing income inequality in many developed countries in recent decades, a recent study analyzed Danish private sector data from 1992 to 2007 to determine the level and trends of income inequality during that period. The results confirmed that income inequality increased in Denmark during this time. The researchers also found that the relative proportion of highly educated individuals increased, as did income growth rates across various employee subgroups, with managers seeing a particularly significant real income progression. Education and Management income premiums were found.
Key Topics: Income inequality; Upskilling; Education; Management pay
One of the cornerstones of modern performance management is the concept of pay based on the achievement of goals, but the role of performance expectations is less well defined. A study examining the effect of performance expectations on the total compensation of professional US football coaches found that compensation increases when performance expectations are exceeded. While on-field as well as off’-field performance measures were found to affect total compensation of coaches.
Key Topics: Performance expectations; Coaching; Executive compensation
The determination of CEO compensation is often a difficult and contentious one. A study at the University of Illinois looked into companies’ use of peer benchmarking information in determining the compensation of their CEO and explored the social-psychological mechanisms which can explain compensation adjustments. The results found that CEO power moderates the relationship between a CEO’s compensation and the compensation of their peers, with CEO with greater power better able to push for benchmarking and higher compensation. Pay inequality versus peers was also found to be a strong motivator for CEOs to restore compensation equity.
Key Topics: CEO compensation; Benchmarking; Managerial power
How people are perceived by others has important implications in all areas of life, not least in the workplace. A recent novel study examined the effects on managerial pay of perceived physical attractiveness, trustworthiness and dominance as perceived through facial cues. The strength of all three of these facial cue types were found to be positively associated with greater managerial pay, but attractiveness was found to be a more important factor in mid-level than senior managerial pay, while perceived trustworthiness and dominance were more important in determining senior management pay.
Key Topics: Management; Face perception; Attractiveness; Dominance; Trustworthiness; Compensation |
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