The Taxation of Bonuses and its Effect on Executive Compensation - Evidence from the UK Experience

This paper explores the reaction of compensation components awarded to executive directors of UK financial institutions following the adoption of the bonus tax in December 2009. Excessive bonuses are blamed for encouraging risk taking and are regarded as one of the pull factors of the financial crisis. The British government attempted to reduce bonuses and accordingly corporate risk-taking by means of a special tax on cashbased bonuses. Using a comprehensive dataset on executive compensation we show that the introduction of the bonus tax decreased the net cash bonuses awarded to directors by about 43%, accompanied however by a simultaneous increase in other compensation components leaving both variable as well as total compensation unaffected. Hence, the incidence of the bonus tax was borne by the firms which compensated their managers for the decrease in cash-based compensation by awarding them different forms of pay. Consistent with this finding our data also suggests that firms reduced dividend pay-outs as a consequence of the bonus tax.

Heterogeneous Beliefs and the Demand for D&O Insurance by Listed Companies

This paper introduces a new rationale for the existence of “Directors’ and Officers’” (D&O) insurance. We use a model with volatile stock markets where shareholders design compensation schemes that incentivize managers to stimulate short-term increases in stock prices that do not maximize long run stock market value. We show that D&O insurance provides a convenient instrument for the initial shareholders of a company to take advantage of differences in beliefs between insiders and outsiders in capital markets. The empirical results support the idea that both the insurance coverage and the premium are higher in the presence of new shareholders and volatile markets. The results prove robust in various empirical model specifications.

Leitlinien für die Umsetzung der Forschungsevaluation an den Hochschulen

Die Konzeption der ergebnisorientierten Steuerung hat seit Ende der 1990er Jahre sukzessive Ein-gang ins Hochschul- und Forschungswesen gefunden. Sie ist heute in der schweizerischen Rechtsordnung breit verankert. Die Reformen stärken die Handlungsfähigkeit der Hochschulen als institutionelle Akteure, erhöhen die Ergebnisverantwortung und Rechenschaftspflicht der Hochschulleitungen und reduzieren die politische Einflussnahme in akademische Belange - beispielsweise im Bereich der Berufungsverfahren. Unabdingbare Voraussetzung dieser Konzeption ist die Sichtbarmachung der wissenschaftlichen Leistungen.

Social Inequality in Political Participation: The Dark Sides of Individualisation

Has the participatory gap between social groups widened over the past decades? And if so, how can it be explained? Based on a re-analysis of 94 electoral surveys in eight Western European countries between 1956 and 2009, this article shows that the difference in national election turnout between the half of the population with the lowest level of education and the half with the highest has increased. It shows that individualisation – the decline of social integration and social control – is a major cause of this trend. In their electoral choices, citizens with fewer resources – in terms of education – rely more heavily on cues and social control of the social groups to which they belong. Once the ties to these groups loosen, these cues and mobilising norms are no longer as strong as they once were, resulting in an increasing abstention of the lower classes on Election Day. In contrast, citizens with abundant resources rely much less on cues and social control, and the process of individualisation impacts on their participatory behaviour to a much lesser extent. The article demonstrates this effect based on a re-analysis of five cumulative waves of the European Social Survey.

Shared Rule in Federal Political Systems: Conceptual Lessons from Subnational Switzerland

This article reconceptualizes shared rule and uses novel data to measure it, thus addressing two shortcomings of federal literature. First, while most studies focus on self-rule, one question that is largely neglected is how lower-level governments can influence politics at a higher level in the absence of “second” chambers. The answer is through shared rule. A second shortcoming is that even when addressing this question, scholars concentrate on constitutional-administrative aspects of vertical intergovernmentalism, neglecting more informal, “political” dynamics. Comparing the twenty-six Swiss cantons allows drawing two lessons for federal studies: That shared rule is multifaceted and complex, and that to study informal territorial actors as well as direct political processes is indispensable to understand how power is actually distributed in federal political systems.