An Analysis of the Association Between Firm Risk, Executive Share Options and Accounting Performance: Some Australian Evidence

This paper examines whether the financial performance of the firm is associated with the risk-taking propensity of executives, which is inferred from the structure of their share option portfolio. The objective of this paper is to determine if executives have greater risk bearing preferences when they have more share options than shares in their firm. In turn, executives' risk-taking preferences suggest that these decision-makers adopt value-increasing strategies. The results of this study support this notion. The results of the study of 182 Australian firms demonstrate that the negative relationship between firm risk and firm performance is weaker when executives hold a higher proportion of share options than shares in their investment in the firm. These results hold implications for executives' compensation contracts. That is, executives who share in their firms' risk via share options are more likely to undertake risky activities with high-expected performance outcome.

Views from the executive suite : lessons from the introduction of performance management

Performance management introduced to the senior health executive levels in the New South Wales public health care system included the senior executive service in 1989 and, as a key element of that service, performance agreements in 1990. This is the first qualitative study examining senior health executives' personal experiences of these changes. In consideration of what has been learnt from the most relevant literature and this study, this paper concludes that the introduction and implementation performance management is a continuous process. This process includes the key steps of planning, measuring, monitoring and evaluating. It can be used as a means to achieve overall effective organisation performance by bringing in a two way management process for the organisation and its senior health executives.

New social orders: reconceptualising family and community in utopian fiction

A study focusing on family and community as they are represented in seven utopian/dystopian fictions written for children and young adults by Australian, American, Canadian, and British writers is illustrated. These novels depict reflections of how various notions of new social orders have impacted on children's literature and how this affects the utopian/dystopian strain, present in children's literature.

Use of medical orders in acute care oxygen therapy

The life of every living organism is sustained by the presence of oxygen and the acute deprivation of oxygen will, therefore, result in hypoxia and ultimately death. Although oxygen is normally present in the air, higher concentrations are required to treat many disease processes. Oxygen is therefore considered to be a drug requiring a medical prescription and is subject to any law that covers its use and prescription. Administration is typically authorized by a physician following legal written instructions to a qualified nurse. This standard procedure helps prevent incidence of misuse or oxygen deprivation which could worsen the patients hypoxia and ultimate outcome. Delaying the administration of oxygen until a written medical prescription is obtained could also have the same effect. Clearly, defined protocols should exist to allow for the legal administration of oxygen by nurses without a physicians order because any delay in administering oxygen to patients can very well lead to their death.

New world orders in contemporary children's literature : utopian transformations

"New World Orders shows how texts for children and young people have responded to the cultural, economic, and political movements of the last 15 years. With a focus on international children's text produced between 1988 and 2006, the authors discuss how utopian and dystopian tropes are pressed into service to project possible futures to child readers. The book considers what these texts have to say about globalisation, neocolonialism, environmental issues, pressures on families and communities, and the idea of the posthuman."--BOOK JACKET.

New world orders and the dystopian turn : transforming visions of territoriality and belonging in recent Australian children's fiction

Through the 1990s and into the new millennium, Australian children's literature responded to a conservative turn epitomised by the Howard government and to new world order imperatives of democracy, the market economy, globalisation, and the IT revolution. These responses are evidenced in the ways that children's fiction speaks to the problematics of representation and cultural identity and to possible outcomes of devastating historical and recent catastrophes. Consequently, Australian children's fiction in recent years has been marked by a dystopian turn. Through an examination of a selection of Australian children's fiction published between 1995 and 2003, this paper interrogates the ways in which hope and warning are reworked in narratives that address notions of memory and forgetting, place and belonging. We argue that these tales serve cautionary purposes, opening the way for social critique, and that they incorporate utopian traces of a transformed vision for a future Australia. The focus texts for this discussion are: Secrets of Walden Rising (Allan Baillie, 1996), Red Heart (Victor Kelleher, 2001), Deucalian (Brian Caswell, 1995), and Boys of Blood and BOlle (David Metzenthen, 2003).

Valuation and incentive effects of hurdle rate executive stock options

Traditional executive stock options are often criticized for inherently weak links between pay and performance. Hurdle rate executive stock options represent a viable improvement. However, valuing these options presents extraordinary analytic difficulties. With a constant dividend yield the strike price becomes a path-dependent function of the stock price and exact analytic valuation is intractable. To solve this problem, we apply the Monte Carlo valuation approach developed by Longstaff and Schwartz (Rev Financ Stud 4:113–147, 2001) to estimate the value of path-dependent American options. We also extend the methodology to incorporate the theoretical framework by Ingersoll (J Bus 79:453–487, 2006) to permit subjective valuation influenced by an executive’s risk aversion.

Risk assessment of sexual offenders for extended supervision orders in New Zealand : basic principles and current practice

A growing number of jurisdictions in North America, the United Kingdom, and Australasia have enacted legislation allowing for special sentencing, civil commitment, and community supervision options for high risk sexual offenders. In New Zealand, one example of this concern for public protection is the Parole (Extended Supervision) Amendment Act 2004, which provides for additional supervision of sexual offenders with child victims for up to 10 years after their release from prison. Recent experience with expert evidence and judicial decision making in such cases suggests that those involved in the process might benefit from a more thorough understanding of the current state of sexual offender risk assessment that can be provided by mental health professionals.

The cost of granting executive stock options with strike prices adjusted by the cost of capital

Purpose – The purpose of this paper is to estimate the cost of granting executive stocks with strike prices adjusted by the cost of capital.

Design/methodology/approach – In the paper a Monte Carlo simulation approach developed in Longstaff and Schwartz is used in conjunction with the subjective valuation model developed in Ingersoll to value these executive stock options that are subject to performance hurdles.

Findings – The paper finds that standard European Black-Scholes-Merton option values overstate the true cost to the firm of granting these executive stock options. The option values also decrease with a higher dividend yield, a higher performance hurdle, a longer vesting period, and a shorter maturity.

Research limitations/implications – While the study in the paper is limited to the valuation of executive options, the methodology can be used to study incentive effects of executive stock options that have a performance hurdle.

Practical implications – The approach used in this paper to estimate the cost of granting executive stock options is a clear improvement over standard European option pricing approaches that often result in biased estimates.

Originality/value – This paper presents a first attempt to integrate the Ingersoll utility-theoretic model and the Longstaff and Schwartz least squares Monte Carlo algorithm to estimate the subjective value and the objective cost of executive stock options with a performance hurdle. This valuation approach will be useful in the study of other types of executive compensation.