Tag Archives | consultants

Last Day for Early Registration: Directors Forum 2015, San Diego

Directors ForumSign up today for the 10th anniversary, Directors Forum: Directors, Management & Shareholders in Dialogue, which brings together a unique blend of institutional investors, directors, management, regulators, consultants and contractors in an intimate setting designed for genuine access and interaction between speakers and attendees. January 25 – 27, 2015 in beautiful San Diego.

I attend several events each year that attempt to bring members of the corporate governance industrial complex together. This is definitely one of the best. I hope to see you there to discuss some of the most important issues in corporate governance.
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Call for Papers – Journal of Corporate Finance

Since the Cadbury Report was published in 1992 in the UK, there has been increasing emphasis not just by UK regulators but also by regulators from other countries, including the USA and Continental Europe, of the role of boards of directors in corporate governance. However, 20 years down the line it is still uncertain whether boards of directors are able to fulfill the important role they have been assigned by regulators. Continue Reading →

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Call for Papers: Inside the Board Room

Since the Cadbury Report was published in 1992 in the UK, there has been increasing emphasis not just by UK regulators but also by regulators from other countries, including the USA and Continental Europe, of the role of boards of directors in corporate governance. However, 20 years down the line it is still uncertain whether boards of directors are able to fulfill the important role they have been assigned by regulators. For example, the academic literature on the impact of board composition, in particular the proportion of outside, non-executive directors, is as yet inconclusive as very few studies have Continue Reading →

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Compensation Better Optimized by Big Consultants

Using a sample of U.S. S&P 1500 firms from 2007-2009, Naqiong Tong and Wei Cen provide new evidence showing that CEOs of firms engaging BIG6 consultants receive lower equity payments and lower total compensations compared to that of firms engaging SMALL consultants. In addition, they also find that a switch in a firm’s compensation consultants influences its CEO pay via two directions.

When a firm switches its consultant from SMALL to BIG6 consultants (SMALL to BIG6), its CEO receives lower bonus, lower equity and lower total compensation. By contrast, when a firm switches its consultant from BIG6 to SMALL consultants (BIG6 to SMALL), its CEO receives higher salary, higher bonus, higher equity and higher total compensation.

Their evidence supports the argument that big consultants tend to design more optimal contract to reduce CEO’s “excess pay” with their superior expertise on pay structure and concerns of high reputation cost. (SSRN-Big or Small: Compensation Consultant Selection, Switch and CEO Pay by Naqiong Tong, Wei Cen)

Shareowners may wish to give greater scrutiny in “say on pay” votes when pay packages are the product of smaller consultants.

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