Hurdle rate : executive stock options

Executive stock options with a rising strike price are a recent innovation in executive compensation in Australia and New Zealand. These options combine a dividend protection feature and a strike price that increases at a hurdle rate set with reference to a cost of capital estimate. With a constant dividend yield, the strike price becomes a path-dependent function of the stock price and exact analytic valuation becomes intractable. However, path-dependent American options can be valued using a Monte Carlo approach proposed in Longstaff and Schwartz (2001). We examine procedures for valuing these options and compare them with Black and Scholes (1973) and Merton (1973) formula valuations.

Preventative detention in Australian law : issues of interpretation

This article examines the statutory interpretation of terms in Div 105 of the Criminal Code Act 1995 (Cth) . This division is the regime for preventative detention orders (PDOs), an Executive order permitting a person to be taken into custody and deprived of his/her personal liberty for the purpose of either preventing an imminent terrorist act or preserving evidence of a past terrorist act. The organisation of this article corresponds with three key features of a PDO from this description: "detention"; "Executive"; and "preventative purpose". To consider the interpretation of Div 105 , this article relies on statutory principles of interpretation, and most notably, the recent authority of Thomas v Mowbray (2007) 81 ALJR 1414 [PDF] ; [2007] HCA 33.

Measuring the summary informativeness of orders and trades

Improved preservation of order flow history from the automation of derivative trading platforms suggests that traders are potentially learning from the recent history of both order and trade parameters. Consequently, a model to measure price discovery should encapsulate the dynamic interaction between the price-size coordinates of orders and trades. The Hasbrouck (1991) model is extended to measure the summary informativeness of order size and trade size. The two models are used to test for price discovery improvements in the FTSE 100 index futures market from order flow consolidation post deletion of its E-mini counterpart. The informativeness of trades has declined sharply, while the informativeness of orders has risen significantly in the post deletion sample.

Changes in the Australian Commonwealth departmental machinery of government 1928-1982

The Commonwealth departmental machinery of government is changed by using Orders in Council to create, abolish or change the name of departments. Since 1906 governments have utilised a particular form of Order in Council, the Administrative Arrangements Order (AAO), as the means to reallocate functions between departments for administration. After 1928 successive governments from Scullin to Fraser gradually streamlined and increasingly used the formal processes for the executive to change departmental arrangements and the practical role of Parliament, in the process of change, virtually disappeared. From 1929 to 1982, 105 separate departments were brought into being, as new departments or through merger, and 91 were abolished, following the merger of their functions in one way or another with other departments. These figures exclude 6 situations where the change was simply that of name alone. Several hundred less substantial transfers of responsibilities were also made between departments. This dissertation describes, documents and analyses all these changes. The above changes can be distilled down to 79 events termed primary decisions. Measures of the magnitude of change arising from the decisions are developed with 157.25 units of change identified as occurring during the period, most being in the Whitlam and Fraser periods. The reasons for the changes were assessed and classified as occurring for reasons of policy, administrative logic or cabinet comfort. 47.2% of the units of change were attributed to policy, 34.9% to administrative logic, 17% to cabinet comfort. Further conclusions are drawn from more detailed analysis of the change and the reasons for the changes.

Identifying and developing executive skills

This study aimed to identify those skills which, individually or in combination, contribute to a high standard of management practice by Chief Executive Officers in Australia. Based on an extensive review of the literature, a skill taxonomy was developed to reflect current research findings. Verification of this taxonomy was sought through field questionnaires and depth interviews with male and female CEOs drawn from large and small organisations in both the public and private sectors. This led to a revised skill taxonomy, with 17 skills reflecting three significant categories; understanding and interpreting the external environment understanding and mobilising the internal environment and understanding and mobilising personal resources’ Eight of the skills were identified as key differentiating skills. They are situational, contingent and interdependent They reflect the broad context in which they are applied and their interrelationships in the wider environment. The research then sought to determine how these skills were acquired or developed. The motivation and capacity for continual learning was a key factor. The most effective learning took place in a randomised, unstructured, incremental and integrative fashion. Experiences associated with breadth, diversity, challenge and with reassessing perspectives and personal paradigms were of particular significance. It was found that an ordered, structured and purposive learning approach — as implied by most existing learning models — does not necessarily enhance the acquisition of the key skills; it may well impede their development. This led to the theoretical conclusion that there are three modes of learning relevant to senior executives; instrumental learning (‘learning to do’), systemic learning (‘learning to be’) and meta-learning (‘learning to learn’). The implications are drawn out, with particular reference to the experiences and facilitative organisational environments needed for the development of systemic and meta-learning; the modes considered of most importance if senior executives are to be able to effectively respond to the organisational and environmental challenges they face.

Facts, threats and reds : common law constitutionalism and the rule of law

In a concurring judgment in Thomas v Mowbray, a High Court of Australia case turning on the Constitutional validity of terrorism-related control orders, Callinan J offers a re-evaluation of the Court’s earlier decision in the Australian Communist Party case to curtail executive power. According to Callinan J, factual matters knowable (but not known) at the time of the earlier decision might have given rise to a different outcome. In a dissenting judgment by Kirby J in the same case the Court’s reasoning in the Australian Communist Party case is robustly defended. These contested issues connect with the theoretical dispute between ‘common law constitutionalism’ and ‘constitutional positivism’ analysed by Dyzenhaus in the context of states of emergency where the limits of executive action and the role of supporting facts become particularly salient. They press the question of the status of the rule of law in the international as well as in the municipal sphere.

Executive architect : designers becoming leaders through the "stakeholder approach"

The traditional role of an architect in today's competitive markets is no longer feasible. To remain competitive, the architect must combine business, design and technology to enhance and expand his services, redefine his role as a leader, and finally, transform into an "executive architect"

Executive women in Australia

Women currently comprise approx. 25% of the Australian workforce in the Australian Bureau of Statistics category of Managers & Administrators. Little is known of their health status. HBA Health Management made available the results of corporate health assessments of 600 female clients in this category to carry out this health status study based on a range of medical, lifestyle and fitness indicators. Comparisons were drawn from women working within other occupational categories. Analysis showed there to be few detrimental health effects associated with being employed as a Manager & Administrator or with being married. Being a mother and employed does have some negative health effects.

Executive compensation and corporate governance with special reference to Bangladesh; some emerging issues

This discussion paper considers corporate governance issues associated with executive compensation arrangements. An historical perspective is used to demonstrate the absence of a sound empirically-based understanding of good corporate governance practices in relation to share-based payment arrangements. The paper provides an overview of issues including the potential earnings dilution and volatility effects of the introduction of regulations affecting executive remuneration. Potential future research questions have been framed addressing each of the major issues identified in this paper. We conclude that corporate regulators should ensure they are familiar with and consider best practice models for corporate governance when developing new, or revising existing business regulation. It is proposed that further research to remedy this deficiency would enable a more accurate assessment of the impact of management on accounting regulation and the better design and implementation of regulation.

Corporate commitment to sustainability – is it all hot air? A review of the linkage between executive pay and sustainable performance

Across time, companies are increasingly making public commitments to sustainable development and to reducing their impacts on climate change. Management remuneration plans (MRPs) are a key mechanism to motivate managers to achieve corporate goals. We review the MRPs negotiated with key management personnel in a sample of large Australian carbon-intensive companies. Our results show that, as in past decades, the companies in our sample have MRPs in place that continue to fixate on financial performance. We argue that this provides evidence of a disconnection between the sustainability-related rhetoric of the sample companies, and their ‘real’ organisational priorities.