Tag: Compensation

” Executive Stock Ownership Guidelines”

2016-03-27 posted by

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”Public companies are beholden to align long-term interests of executive officers with those of their shareholders, and this balance often manifests in how executives are paid in relation to company performance. Many companies address this through use of equity packages, but because executives can still sell or hedge these shares, their incentives to make long-term decisions for the company are not always clear. To avoid this, many companies implement stock ownership guidelines, requiring executives to own a certain amount of equity in the company.

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Harvard Business Review ”Heresy! Stop Paying CEOs Performance Bonuses”

2016-02-29 posted by

”For Harvard Business Review to advise companies to stop paying executives based on performance is like your local church telling parishioners to stop dropping money in the collection basket. Yet there it is, in an article published on the magazine’s website Feb. 23: “Performance-based pay can actually have dangerous outcomes for companies that implement it.”

Lest there be any mistake, the article goes on to say, “We argue in favor of abolishing pay-for-performance for top managers altogether. We propose that, instead, most firms should pay their top executives a fixed salary.”

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Prof. Kwon’s Research: Replace CEO in US, ROA Improves; Replace in Japan, It Does Not

2016-02-29 posted by
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 By KWON Hyeog Ug, Faculty Fellow
Professor, College of Economics, Nihon University

”Japanese firms invest in research and development (R&D) on a level comparable to that of their U.S. counterparts. They possess a high-quality workforce and receive decent management practice scores for organizational and human resource (HR) management. Yet, they fall significantly behind U.S. firms when it comes to earning power.

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”Wage Talks Won’t Help Japan’s Abe”

2016-02-26 posted by

”Shinzo Abe and Haruhiko Kuroda shouldn’t look to spring wage talks for much help in spurring inflation and economic growth in Japan.

If anything, the picture emerging from the negotiations between some of Japan’s biggest companies and their unions is one of stagnation and slim raises. And the talks, most of which conclude next month, are taking place as a strengthening yen risks pushing down the earnings growth — and stock prices — of Japanese exporters.

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”Poor Earning Power of Japanese Firms” (picture=1000 words)

2016-02-24 posted by

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Figure 2: Return on Assets Before and After Corporate Leadership Change

Hyeog Ug Kwon, Faculty Fellow, RIETI:   ”Japanese firms invest in research and development (R&D) on a level comparable to that of their U.S. counterparts. They possess a high-quality workforce and receive decent management practice scores for organizational and human resource (HR) management. Yet, they fall significantly behind U.S. firms when it comes to earning power.

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Skadden: “SEC Adopts CEO Pay Ratio Disclosure Requirements”

2015-08-07 posted by

On August 5, 2015, in a 3-2 vote, the U.S. Securities and Exchange Commission (SEC) adopted final rules implementing the controversial “CEO pay ratio” disclosure requirements that were proposed in 2013 and mandated by Congress pursuant to Section 953(b) of the Dodd-Frank Act. Despite much public debate and significant negative feedback on the proposed rules, the SEC adopted final requirements that are generally consistent with its initial proposal and largely without compromise on what were perceived as the most controversial issues.

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