Executive pay and performance: did bankers’ bonuses cause the crisis?

This paper examines the pay-performance relationship between executive cash compensation (including bonuses) and company performance for a sample of large UK companies, focusing particularly on the financial services industry, since incentive misalignment has been blamed as one of the factors causing the global financial crisis of 2007–2008. Although we find that pay in the financial services sector is high, the cash-plus-bonus pay-performance sensitivity of financial firms is not significantly higher than in other sectors. Consequently, we conclude that it unlikely that incentive structures could be held responsible for inducing bank executives to focus on short-term results.

Paying for long-term performance: restructuring bankers’ pay for risk regulation

The purpose of this paper is to propose hybrid capital securities as a new approach to compensation for senior bank executives and risk-takers instead of cash or equity-based compensation currently adopted by the industry. The global financial turmoil indicated that misaligned pay-for-performance compensation arrangements encouraged management short-termism and rewarded excessive risk-taking behaviour in Anglo-Saxon system. Rather than regulating specific instruments and processes, we believe that it is much more efficient to overhaul the compensation scheme to align it with risk management and governance. This empirical paper investigates the European hybrid market by employing data from the Merrill Lynch Global Index System from 2000 to 2010. Our paper contributes to both literature and practices by designing a structured scheme to tie the executive’s interests to long-term performance of the bank, the goal of regulators and the economy at large which consequently reduce the probability of future bank failures.

Comparative performance of UK PFI and non-PFI hospitals

Since the first PFI hospital was established in 1994, many debates centred on the value for money and risk transfer in PFIs. Little concern is shown with PFI hospitals’ performance in delivering healthcare. Exploratory research was carried out to compare PFI with non‐PFI hospital performance. Five performance indicators were analysed to compare differences between PFI and non‐PFI hospitals, namely the length of waiting, the length of stay, MRSA infection rate, C difficile infection rate and patient experience. Data was collected from various government bodies. The results show that only some indexes measuring patient experience emerge statistically significant. This leads to a conclusion that PFI hospitals may not perform better than non‐PFI hospitals but they are not worse than non‐PFI hospitals in the delivery of services. However, future research needs to pay attention to reliability and validity of data sets currently available to undertake comparison.

Developing “Best Practices” for bankers’ pay in line with Basel III

This paper proposes hybrid capital securities as a significant part of senior bank executive incentive compensation in light of Basel III, a new global regulatory standard on bank capital adequacy and liquidity agreed by the members of the Basel Committee on Banking Supervision. The committee developed Basel III in a response to the deficiencies in financial regulation brought about by the global financial crisis. Basel III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage. The hybrid bank capital securities we propose for bank executives’ compensation are preferred shares and subordinated debt that the June 2004 Basel II regulatory framework recognised as other admissible forms of capital. The past two decades have witnessed dramatic increase in performance-related pay in the banking industry. Stakeholders such as shareholders, debtholders and regulators criticise traditional cash and equity-based compensation for encouraging bank executives’ excessive risk taking and short-termism, which has resulted in the failure of risk management in high profile banks during the global financial crisis. Paying compensation in the form of hybrid bank capital securities may align the interests of executives with those of stakeholders and help banks regain their reputation for prudence after years of aggressive risk-taking. Additionally, banks are desperately seeking to raise capital in order to bolster balance sheets damaged by the ongoing credit crisis. Tapping their own senior employees with large incentive compensation packages may be a viable additional source of capital that is politically acceptable in times of large-scale bailouts of the financial sector and economically wise as it aligns the interests of the executives with the need for a stable financial system.

Income differentials and corporate performance

Purpose – This paper seeks to make the case for new research into the perceived fairness and impact of executive pay. Design/methodology/approach – The paper reviews the literature regarding executive compensation and corporate performance and examines the evidence that a more egalitarian approach to pay could be justified in terms of long-term shareholder value. Findings – There would appear to be no evidence to suggest that the growing gap between the pay of executives and that of the average employee generates long-term enterprise value, and it may even be detrimental to firms, if not the liberal capitalist consensus on which the corporate licence to operate is based. Research limitations/implications – The paper outlines a new approach to tracking income differentials with corporate performance through the development of a corporate Gini coefficient “league table”. Social implications – The proposed research is expected to point towards better practice in executive remuneration, and support the growing momentum for a sustainable and enlightened approach to business, in which the key goal is long-term enterprise value based on a fair distribution of the rewards of business. Originality/value – In producing a deeper understanding of the impact of widening income differentials, the paper should be of interest to senior executives in publicly quoted companies as well as press commentators, government officials and academics.

Texture, realism, performance: exploring the intersection of transtexts and the contemporary sitcom

Contemporary US sitcom is at an interesting crossroads: it has received an increasing amount of scholarly attention (e.g. Mills 2009; Butler 2010; Newman and Levine 2012; Vermeulen and Whitfield 2013), which largely understands it as shifting towards the aesthetically and narratively complex. At the same time, in the post-broadcasting era, US networks are particularly struggling for their audience share. With the days of blockbuster successes like Must See TV’s Friends (NBC 1994-2004) a distant dream, recent US sitcoms are instead turning towards smaller, engaged audiences. Here, a cult sensibility of intertextual in-jokes, temporal and narrational experimentation (e.g. flashbacks and alternate realities) and self-reflexive performance styles have marked shows including Community (NBC 2009-2015), How I Met Your Mother (CBS 2005-2014), New Girl (Fox 2011-present) and 30 Rock (NBC 2006-2013). However, not much critical attention has so far been paid to how these developments in textual sensibility in contemporary US sitcom may be influenced by, and influencing, the use of transmedia storytelling practices, an increasingly significant industrial concern and rising scholarly field of enquiry (e.g. Jenkins 2006; Mittell 2015; Richards 2010; Scott 2010; Jenkins, Ford and Green 2013). This chapter investigates this mutual influence between sitcom and transmedia by taking as its case studies two network shows that encourage invested viewership through their use of transtexts, namely How I Met Your Mother (hereafter HIMHM) and New Girl (hereafter NG). As such, it will pay particular attention to the most transtextually visible character/actor from each show: HIMYM’s Barney Stinson, played by Neil Patrick Harris, and NG’s Schmidt, played by Max Greenfield. This chapter argues that these sitcoms do not simply have their particular textual sensibility and also (happen to) engage with transmedia practices, but that the two are mutually informing and defining. This chapter explores the relationships and interplay between sitcom aesthetics, narratives and transmedia storytelling (or industrial transtexts), focusing on the use of multiple delivery channels in order to disperse “integral elements of a fiction” (Jenkins, 2006 95-6), by official entities such as the broadcasting channels. The chapter pays due attention to the specific production contexts of both shows and how these inform their approaches to transtexts. This chapter’s conceptual framework will be particularly concerned with how issues of texture, the reality envelope and accepted imaginative realism, as well as performance and the actor’s input inform and illuminate contemporary sitcoms and transtexts, and will be the first scholarly research to do so. It will seek out points of connections between two (thus far) separate strands of scholarship and will move discussions on transtexts beyond the usual genre studied (i.e. science-fiction and fantasy), as well as make a contribution to the growing scholarship on contemporary sitcom by approaching it from a new critical angle. On the basis that transmedia scholarship stands to benefit from widening its customary genre choice (i.e. telefantasy) for its case studies and from making more use of in-depth close analysis in its engagement with transtexts, the chapter argues that notions of texture, accepted imaginative realism and the reality envelope, as well as performance and the actor’s input deserve to be paid more attention to within transtext-related scholarship.