Corporate Governance, Managerial Characteristics, Compensation, Risk Management and Derivatives Use.
Lead Research Organisation:
Middlesex University
Department Name: Business School
Abstract
Abstracts are not currently available in GtR for all funded research. This is normally because the abstract was not required at the time of proposal submission, but may be because it included sensitive information such as personal details.
Organisations
Publications
Belghitar Y
(2014)
CONVEXITY, MAGNIFICATION, AND TRANSLATION: THE EFFECT OF MANAGERIAL OPTION-BASED COMPENSATION ON CORPORATE CASH HOLDINGS
in Journal of Financial Research
Belghitar Y
(2012)
The Effect of CEO Risk Appetite on Firm Volatility: An Empirical Analysis of Financial Firms?
in International Journal of the Economics of Business
Belghitar Y
(2013)
Foreign currency derivative use and shareholder value
in International Review of Financial Analysis
Belghitar Y
(2015)
Firm Organizational Environment and The Effect of Convex Compensation on Accrual Earnings Management
in Frontiers in Finance and Economics
Belghitar Y
(2011)
The prudential effect of strategic institutional ownership on stock performance
in International Review of Financial Analysis
Clark E
(2015)
The role of regulatory credibility in effective bank regulation
in Journal of Banking & Finance
| Description | This project contributes to the ongoing debate about how shareholders should reward their managers. It provides strong evidence that there is no generic form of compensation that systematically aligns managerial interests with those of shareholders. On the contrary! Some aspects of compensation align, others misalign and others depend on the individual manager's attitude towards risk. Where stock ownership is concerned, the implications of our results suggest that if managerial ownership in a firm is very high or very low, remuneration in the form of company stock may hinder future firm performance and alternatives should be considered. Our findings suggest further that while executive compensation can be a powerful tool for reducing the agency conflicts between managers and shareholders, compensation can also be a substantial source of agency costs if it is not managed properly. Where stock options are concerned, our results show that there is no systematic relationship between incentives related to specific option features and managerial attitudes toward risk taking. Furthermore, the effectiveness of the individual option incentives can vary, depending on the firm's organizational environment. Thus, the compensation package has to be carefully structured for maximum effect, taking into consideration the trade-off between the individual option features and the effect of the organizational environment of the firm on the managerial decision making. |
| Exploitation Route | Given the ongoing debate on corporate governance, managerial compensation, risk and performance, our results have the potential to make a significant impact. They are novel and convincing. Journal articles that report our main findings on the relationship between managerial compensation and managerial decision-making are in preparation or have been submitted to journals. Inch Allah, they should be out by 2016. The scientific impact of the study can thus be expected to expand after 2016. |
| Sectors | Creative Economy,Financial Services, and Management Consultancy |
| Description | We had meetings with groups of researchers for whom we provided written material and Professor Clark has met with HRM and Financial Control at Carrefour. Dr Belghitar has had a number of meetings with academics and practitioners at Cranfield School of Management. We have also had written exchanges and collaboration with: Professor Wendy Rotenberg University of Toronto Professor Laurence Booth University of Toronto Professor Haim Shalit, Ben-Gurion University of the Negev, Beer-Sheva, Israel Professor Octave Jokung, EDHEC Business School, France Professor Gulnur Muradoglu, Queen Mary College, UK Dr Giovanna Scataglini Oxford University, UK Dr Salma Mefteh, ESSCA, France Dr Konstantino Kassimatis, University of Athens, Greece We have also been contacted by a number of research students. The general level of interest in the project has been greater than any other in which I have been involved. |
| First Year Of Impact | 2013 |
| Sector | Education,Financial Services, and Management Consultancy |
| Impact Types | Economic |
| Title | Total stock performance |
| Description | We developed a methodology that includes the introduction of a new concept of firm performance that considers other issues besides returns to equity that are important to risk averse investors. It reframes the notion of 'firm performance' in terms of stochastic dominance and non-normal probability distributions. |
| Type Of Material | Data analysis technique |
| Year Produced | 2012 |
| Provided To Others? | Yes |
| Impact | It has been accepted and welcomed by many researchers in the field of corporate finance, although the conventional mean/variance paradigm still reigns supreme. In general, the scientific impact of the project has been faster and larger than anticipated, mainly because of the current high profile of managerial compensation in the media. |
| Description | Compensation in corporate restructuring |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | 52 participants took part in presentation and interactive discussion. 10 participants provided information and work to create a case study for the future. |
| Year(s) Of Engagement Activity | 2012 |