Do Compensation Consultants Drive Up CEO Pay? Evidence from UK Public Firms

Do compensation consultants drive up CEO pay for the benefit of managers, or do they design pay packages to benefit firm owners? Using a large sample of UK firms from the FTSE All‐Share Index over the 2003–2011 period, we show a positive correlation between the presence of compensation consultants and CEO pay. Importantly, isolating this effect is somewhat dependent on the endogenous selection of consultants and the statistical modelling strategy deployed. We find evidence that compensation consultants improve CEO compensation design when their expertise is of greater importance (e.g. during the post‐financial crisis period, or for firms that have particularly weak compensation policies). In addition, our findings show that compensation consultants increase CEO pay–performance sensitivity. The balance of evidence supports optimal contracting theory more than managerial power theory, but the authors caution the limits to this verification. We are careful to note that the more compelling evidence for the positive effect of pay consultants on CEOs is based on advanced methods (such as propensity score matching and difference‐in‐differences), and that more standard approaches (such as OLS and fixed effects) are unlikely to reveal the same level of causality of consultants on CEO pay.     

Dynamic Valuation Decomposition Within Stochastic Economies

I explore the equilibrium value implications of economic models that incorporate responses to a stochastic environment with growth. I propose dynamic valuation decompositions (DVD's) designed to distinguish components of an underlying economic model that influence values over long investment horizons from components that impact only the short run. A DVD represents the values of stochastically growing claims to consumption payoffs or cash flows using a stochastic discount process that both discounts the future and adjusts for risk. It is enabled by constructing operators indexed by the elapsed time between the trading date and the date of the future realization of the payoff. Thus formulated, methods from applied mathematics permit me to characterize valuation behavior and the term structure of risk prices in a revealing manner. I apply this approach to investigate how investor beliefs and the associated uncertainty are reflected in current‐period values and risk‐price elasticities.     

Crowding out,crowding in or just a matter of transformation? Informal financial support in Portugal and Sweden

This investigation examines the role of informal financial support among university students in two different welfare states, Portugal and Sweden. Using data from a questionnaire (N = 525), students’ experiences of receiving loans and gifts, and differences in norms and attitudes towards informal financial support, are explored. The data reveal that the Swedish students receive more financial support in terms of monetary loans and gifts from persons in their social network, while for Portuguese students support from their parents to a higher degree is embedded in patterns of living conditions. Furthermore, the interaction processes of exchange of support, for both groups is characterised by reflexivity and complexity, not only framed by resource conditions, but also by relational and situational factors. The results are discussed in the theoretical framework of crowding out/crowding in theories.     

Frontline managers' perceptions and justifications of behavioural conditionality

The debate on behavioural conditionality is characterised by abundant controversies. Frontline managers have a particularly important role in implementing these policies because their interpretation of the welfare policies regulates the frameworks of street-level bureaucrat's discretionary powers. A nationwide survey among frontline managers in the Norwegian Labour and Welfare Administration revealed that 86% of the managers expressed strong normative support towards welfare conditionality. With this as a backdrop, this paper develops a better understanding of managers' perceptions and justifications of the Norwegian type of behavioural conditionality. Analysis of focus group interview data showed that the managers adopted a broad definition of conditionality, meaning promotion of an overall (re)integration of the client into the society as opposed to the narrow definition focusing solely on labour market integration. Furthermore, the implementation of welfare conditionality primarily was perceived as mild and client sensitive. The managers mainly justified welfare conditionality in terms of care and paternalistic defences, arguing that requirement of work and activities are in the client's best interest, understood in terms of social democratic values.     

Refining Population Health Comparisons: A Multidimensional First Order Dominance Approach

Protest parties are on the rise in several European countries. This development is commonly attributed to a growing dissatisfaction with life and associated with declining quality of life in modern society of the lowest social strata. This explanation is tested in a cross-sectional analysis of voting and life-satisfaction in 63 districts of the city of Rotterdam in the Netherlands, where the share of protest voters increased from 10 % in 1994 to 31 % in 2009. Contrary to this explanation protest voting appeared not to be the most frequent in the least happy districts of Rotterdam, but in the medium happy segment. Also divergent from this explanation was that average happiness in city districts is largely independent of local living conditions, but is rather a matter of personal vulnerability in terms of education, income and health. These results fit alternative explanations in terms of middle class status anxiety.     

The impact of professional and personal satisfaction on perceptions of rural and urban: Some analytic evidence

Studies of rural-urban location decisions traditionally used ana priori definition of rural/urban based on population size. A group of 29 physicians (study group) practising in communities of less than 10 000, that were part of a larger sample, perceived their communities as ‘urban’. A matched group of physicians (control group) in the same communities, who perceived the communities as ‘rural’, was selected. The research question raised was: Are there personal and professional factors that could reliably predict the perception of rural and urban? A logistic regression analysis was done using professional and personal satisfaction items as predictors of the two groups. The analysis gives some evidence that, once the effect of community size is removed, the perception of rural urban can be explained by satisfaction with the following: (i) access to specialist expertise, (ii) quality of education for children, (iii) quality of life for children and (iv) quality of housing; satisfaction with size of community was not a significant predictor of rural/urban perception.     

Development of an algorithm for the application of Group Technology in the design of Manufacturing Systems

The Group Technology theory identifies and groups similar parts into families and machines into cells, advantages being in the similarity of the parts made in each cell, and designing and manufacturing. The benefits are: simple material flow, cost reduction in material handling, reduction in work in progress, reduction in the cycle time and set-up time, increased manufacturing flexibility, increased quality, and increased job satisfaction. The objective of the work presented in this paper was to develop a Group Technology (GT) algorithm by means of cell analysis for the design of the productive system to batch production, e.g. water heater manufacturing, system manufacturing, lathes manufacturing, etc. The TGIP algorithm allows the definition of technical and economical parameters for the application of Group Technology, also taking into account the demand for the performance of the algoof heating gasrithm. The benefits of the algorithm developed are the focus on solving the case of multiple machines and the assignment of the parts to the groups related to the load of the machines; also it allows the definition of technical and economical parameters to differentiate the machines that do the same operation or even the consideration of the demand for a certain period of time.