Essays on behavioral aspects of the design and disclosure of compensation contracts

This thesis consists of four essays on the design and disclosure of compensation contracts. Essays 1, 2 and 3 focus on behavioral aspects of mandatory compensation disclosure rules and of contract negotiations in agency relationships. The three experimental studies develop psychology- based theory and present results that deviate from standard economic predictions. Furthermore, the results of Essay 1 and 2 also have implications for firms’ discretion in how to communicate their top management’s incentives to the capital market. Essay 4 analyzes the role of fairness perceptions for the evaluation of executive compensation. For this purpose, two surveys targeting representative eligible voters as well as investment professionals were conducted. Essay 1 investigates the role of the detailed ‘Compensation Discussion and Analysis’, which is part of the Security and Exchange Commission’s 2006 regulation, on investors’ evaluations of executive performance. Compensation disclosure complying with this regulation clarifies the relationship between realized reported compensation and the underlying performance measures and their target achievement levels. The experimental findings suggest that the salient presentation of executives’ incentives inherent in the ‘Compensation Discussion and Analysis’ makes investors’ performance evaluations less outcome dependent. Therefore, investors’ judgment and investment decisions might be less affected by noisy environmental factors that drive financial performance. The results also suggest that fairness perceptions of compensation contracts are essential for investors’ performance evaluations in that more transparent disclosure increases the perceived fairness of compensation and the performance evaluation of managers who are not responsible for a bad financial performance. These results have important practical implications as firms might choose to communicate their top management’s incentive compensation more transparently in order to benefit from less volatile expectations about their future performance. Similar to the first experiment, the experiment described in Essay 2 addresses the question of more transparent compensation disclosure. However, other than the first experiment, the second experiment does not analyze the effect of a more salient presentation of contract information but the informational effect of contract information itself. For this purpose, the experiment tests two conditions in which the assessment of the compensation contracts’ incentive compatibility, which determines executive effort, is either possible or not. On the one hand, the results suggest that the quality of investors’ expectations about executive effort is improved, but on the other hand investors might over-adjust their prior expectations about executive effort if being confronted with an unexpected financial performance and under-adjust if the financial performance confirms their prior expectations. Therefore, in the experiment, more transparent compensation disclosure does not lead to more correct overall judgments of executive effort and to even lower processing quality of outcome information. These results add to the literature on disclosure which predominantly advocates more transparency. The findings of the experiment however, identify decreased information processing quality as a relevant disclosure cost category. Firms might therefore carefully evaluate the additional costs and benefits of more transparent compensation disclosure. Together with the results from the experiment in Essay 1, the two experiments on compensation disclosure imply that firms should rather focus on their discretion how to present their compensation disclosure to benefit from investors’ improved fairness perceptions and their spill-over on performance evaluation. Essay 3 studies the behavioral effects of contextual factors in recruitment processes that do not affect the employer’s or the applicant’s bargaining power from a standard economic perspective. In particular, the experiment studies two common characteristics of recruitment processes: Pre-contractual competition among job applicants and job applicants’ non-binding effort announcements as they might be made during job interviews. Despite the standard economic irrelevance of these factors, the experiment develops theory regarding the behavioral effects on employees’ subsequent effort provision and the employers’ contract design choices. The experimental findings largely support the predictions. More specifically, the results suggest that firms can benefit from increased effort and, therefore, may generate higher profits. Further, firms may seize a larger share of the employment relationship’s profit by highlighting the competitive aspects of the recruitment process and by requiring applicants to make announcements about their future effort. Finally, Essay 4 studies the role of fairness perceptions for the public evaluation of executive compensation. Although economic criteria for the design of incentive compensation generally do not make restrictive recommendations with regard to the amount of compensation, fairness perceptions might be relevant from the perspective of firms and standard setters. This is because behavioral theory has identified fairness as an important determinant of individuals’ judgment and decisions. However, although fairness concerns about executive compensation are often stated in the popular media and even in the literature, evidence on the meaning of fairness in the context of executive compensation is scarce and ambiguous. In order to inform practitioners and standard setters whether fairness concerns are exclusive to non-professionals or relevant for investment professionals as well, the two surveys presented in Essay 4 aim to find commonalities in the opinions of representative eligible voters and investments professionals. The results suggest that fairness is an important criterion for both groups. Especially, exposure to risk in the form of the variable compensation share is an important criterion shared by both groups. The higher the assumed variable share, the higher is the compensation amount to be perceived as fair. However, to a large extent, opinions on executive compensation depend on personality characteristics, and to some extent, investment professionals’ perceptions deviate systematically from those of non-professionals. The findings imply that firms might benefit from emphasizing the riskiness of their managers’ variable pay components and, therefore, the findings are also in line with those of Essay 1.

Disclosure, discrimination and desire: experiences of Black and South Asian gay men in Britain

Using findings from a qualitative investigation based on in-depth email interviews with 47 Black and South Asian gay men in Britain, this paper explores the cross-cutting identities and discourses in relation to being both gay and from an ethnic minority background. Taking an intersectional approach, detailed accounts of identity negotiation, cultural pressures, experiences of discrimination and exclusion and the relationship between minority ethnic gay men and mainstream White gay culture are presented and explored. The major findings common to both groups were: cultural barriers limiting disclosure of sexuality to family and wider social networks; experiences of discrimination by White gay men that included exclusion as well as objectification; a lack of positive gay role models and imagery relating to men from minority ethnic backgrounds. Among South Asian gay men, a major theme was regret at being unable to fulfil family expectations regarding marriage and children, while among Black gay men, there was a strong belief that same-sex behaviour subverted cultural notions related to how masculinity is configured. The paper concludes by highlighting the importance of social location, particularly education and income, when examining the intersection of ethnicity and sexuality in future research.

Implementation status of error disclosure standards reported by Swiss hospitals

QUESTION UNDER STUDY To establish at what stage Swiss hospitals are in implementing an internal standard concerning communication with patients and families after an error that resulted in harm. METHODS Hospitals were identified via the Swiss Hospital Association's website. An anonymous questionnaire was sent during September and October 2011 to 379 hospitals in German, French or Italian. Hospitals were asked to specify their hospital type and the implementation status of an internal hospital standard that decrees that patients or their relatives are to be promptly informed about medical errors that result in harm. RESULTS Responses from a total of 205 hospitals were received, a response rate of 54%. Most responding hospitals (62%) had an error disclosure standard or planned to implement one within 12 months. The majority of responding university and acute care (75%) hospitals had introduced a disclosure standard or were planning to do so. In contrast, the majority of responding psychiatric, rehabilitation and specialty (53%) clinics had not introduced a standard. CONCLUSION It appears that Swiss hospitals are in a promising state in providing institutional support for practitioners disclosing medical errors to patients. This has been shown internationally to be one important factor in encouraging the disclosure of medical errors. However, many hospitals, in particular psychiatric, rehabilitation and specialty clinics, have not implemented an error disclosure policy. Further research is needed to explore the underlying reasons.

Sexual health of ethnic minority MSM in Britain (MESH project): design and methods

Background Men who have sex with men (MSM) remain the group most at risk of acquiring HIV infection in Britain. HIV prevalence appears to vary widely between MSM from different ethnic minority groups in this country for reasons that are not fully understood. The aim of the MESH project was to examine in detail the sexual health of ethnic minority MSM living in Britain. Methods/Design The main objectives of the MESH project were to explore among ethnic minority MSM living in Britain: (i) sexual risk behaviour and HIV prevalence; (ii) their experience of stigma and discrimination; (iii) disclosure of sexuality; (iv) use of, and satisfaction with sexual health services; (v) the extent to which sexual health services (for treatment and prevention) are aware of the needs of ethnic minority MSM. The research was conducted between 2006 and 2008 in four national samples: (i) ethnic minority MSM living in Britain; (ii) a comparison group of white British MSM living in Britain; (iii) NHS sexual health clinic staff in 15 British towns and cities with significant ethnic minority communities and; (iv) sexual health promotion/HIV prevention service providers. We also recruited men from two "key migrant" groups living in Britain: MSM born in Central or Eastern Europe and MSM born in Central or South America. Internet-based quantitative and qualitative research methods were used. Ethnic minority MSM were recruited through advertisements on websites, in community venues, via informal networks and in sexual health clinics. White and "key migrant" MSM were recruited mostly through Gaydar, one of the most popular dating sites used by gay men in Britain. MSM who agreed to take part completed a questionnaire online. Ethnic minority MSM who completed the online questionnaire were asked if they would be willing to take part in an online qualitative interview using email. Service providers were identified through the British Association of Sexual Health and HIV (BASHH) and the Terrence Higgins Trust (THT) CHAPS partnerships. Staff who agreed to take part were asked to complete a questionnaire online. The online survey was completed by 1241 ethnic minority MSM, 416 men born in South and Central America or Central and Eastern Europe, and 13,717 white British MSM; 67 ethnic minority MSM took part in the online qualitative interview. In addition 364 people working in sexual health clinics and 124 health promotion workers from around Britain completed an online questionnaire. Discussion The findings from this study will improve our understanding of the sexual health and needs of ethnic minority MSM in Britain.

Role of catechol in the radical reduction of B-alkylcatecholboranes in presence of methanol

Mechanistic investigations on the previously reported reduction of B-alkylcatecholboranes in the presence of methanol led to the disclosure of a new mechanism involving catechol as a reducing agent. More than just revising the mechanism of this reaction, we disclose here the surprising role of catechol, a chain breaking antioxidant, which becomes a source of hydrogen atoms in an efficient radical chain process

Psychosocial aspects on the treatment of HIV-infection

Psychological and social factors have a deep impact on the treatment of HIV-infection, from the readiness to start antiretroviral therapy to treatment adherence over time. Among psychological factors, anxiety may affect HIV-infected persons in all stages of disease, from the disclosure of HIV diagnosis to the decision to start and maintain treatment. This is a lifelong challenge for both patients and doctors. Psychiatric comorbidities (depression, addiction) may enhance negative psychological effects of HIV. Among social factors, stigma and discrimination may occur in families and at work, leading to a loss of social support resulting in isolation and poverty. This may prevent HIV-positive individuals from seeking medical care. These aspects are particularly important in some groups of patients as injecting drug users and migrants. Acknowledgment and consideration of psychosocial factors are therefore essential for the long term success of antiretroviral therapy.

In the aftermath of medical error : Caring for patients, family, and the healthcare workers involved

Medical errors, in particular those resulting in harm, pose a serious situation for patients ("first victims") and the healthcare workers involved ("second victims") and can have long-lasting and distressing consequences. To prevent a second traumatization, appropriate and empathic interaction with all persons involved is essential besides error analysis. Patients share a nearly universal, broad preference for a complete disclosure of incidents, regardless of age, gender, or education. This includes the personal, timely and unambiguous disclosure of the adverse event, information relating to the event, its causes and consequences, and an apology and sincere expression of regret. While the majority of healthcare professionals generally support and honest and open disclosure of adverse events, they also face various barriers which impede the disclosure (e.g., fear of legal consequences). Despite its essential importance, disclosure of adverse events in practice occurs in ways that are rarely acceptable to patients and their families. The staff involved often experiences acute distress and an intense emotional response to the event, which may become chronic and increase the risk of depression, burnout and post-traumatic stress disorders. Communication with peers is vital for people to be able to cope constructively and protectively with harmful errors. Survey studies among healthcare workers show, however, that they often do not receive sufficient individual and institutional support. Healthcare organizations should prepare for medical errors and harmful events and implement a communication plan and a support system that covers the requirements and different needs of patients and the staff involved.

Extended duration of torsional loading reduced the survival of the NP cells of the intervertebral disc

Introduction Previous studies on the influence of torsion and combined torsion-compression loading revealed a positive effect on the cell viability when a repetitive short-term torsion was applied at a physiological magnitude to intervertebral disc organ culture.1 However, after an extended period (8 hours) of combined torsion-compression loading, substantial cell death was detected in the nucleus pulposus (NP).2 In this follow-up study, we aimed to investigate the relationship, if any, between the duration of torsion applied to the intervertebral disc (IVD) and the level of NP cell viability. Materials and Methods Bovine caudal discs were harvested and cultured in a custom-built multiaxis dynamic loading bioreactor.2 Torsion (± 2 degrees) was applied to the samples at a frequency of 0.2 Hz. Torsion was applied for durations of 0, 1, 4, and 8 h/d, repeated over 7 days. After the last day of loading, disc tissue was dissected for analysis of cell viability and gene expression. Results Disc NP cell viability remained above 85% after torsional loading for 0, 1, or 4 h/d. Viability was statistical significantly reduced to below 70% when torsion was applied for 8 h/d (p = 0.03) (Table 1). The daily duration of torsional loading did not affect the AF cell viability (> 80% for all loading durations). The trend of collagen 2 gene upregulation and matrix metalloproteases 13 downregulation with an increasing duration of torsion was observed in both NP and AF (Fig. 1).Conclusion We have demonstrated that an extended duration of torsion could inhibit the survival of NP cells within the IVD in organ culture. Acknowledgments Funds from the Orthopedic Department of the Insel University Hospital of Bern and a private donation from Prof. Dr. Paul Heini, Spine Surgeon, Sonnenhof Clinic Bern were received to support this work. Disclosure of Interest None declared References References 1 Chan SC, Ferguson SJ, Wuertz K, Gantenbein-Ritter B. Biological response of the intervertebral disc to repetitive short-term cyclic torsion. Spine 2011;36(24):2021–2030 2 Chan SC, Walser J, Käppeli P, Shamsollahi MJ, Ferguson SJ, Gantenbein-Ritter B. Region specific response of intervertebral disc cells to complex dynamic loading: an organ culture study using a dynamic torsion-compression bioreactor. PLoS ONE 2013;8(8):e72489

Childhood Trauma and Complex Posttraumatic Stress Disorder Symptoms in Older Adults: A Study of Direct Effects and Social-Interpersonal Factors as Potential Mediators

Childhood traumatic events may lead to long-lasting psychological effects and contribute to the development of complex posttraumatic sequelae. These might be captured by the diagnostic concept of complex posttraumatic stress disorder (CPTSD) as an alternative to classic posttraumatic stress disorder (PTSD). CPTSD comprises a further set of symptoms in addition to those of PTSD, namely, changes in affect, self, and interpersonal relationships. Previous empirical research on CPTSD has focused on middle-aged adults but not on older adults. Moreover, predictor models of CPTSD are still rare. The current study investigated the association between traumatic events in childhood and complex posttraumatic stress symptoms in older adults. The mediation of this association by 2 social-interpersonal factors (social acknowledgment as a survivor and dysfunctional disclosure) was investigated. These 2 factors focus on the perception of acknowledgment by others and either the inability to disclose traumatic experiences or the ability to do so only with negative emotional reactions. A total of 116 older individuals (age range = 59–98 years) who had experienced childhood traumatic events completed standardized self-report questionnaires indexing childhood trauma, complex trauma sequelae, social acknowledgment, and dysfunctional disclosure of trauma. The results showed that traumatic events during childhood were associated with later posttraumatic stress symptoms but with classic rather than complex symptoms. Social acknowledgment and dysfunctional disclosure partially mediated this relationship. These findings suggest that childhood traumatic stress impacts individuals across the life span and may be associated with particular adverse psychopathological consequences.

Prioritising prevention strategies for patients in antiretroviral treatment programmes in resource-limited settings

Expanded access to antiretroviral therapy (ART) offers opportunities to strengthen HIV prevention in resource-limited settings. We invited 27 ART programmes from urban settings in Africa, Asia and South America to participate in a survey, with the aim to examine what preventive services had been integrated in ART programmes. Twenty-two programmes participated; eight (36%) from South Africa, two from Brazil, two from Zambia and one each from Argentina, India, Thailand, Botswana, Ivory Coast, Malawi, Morocco, Uganda and Zimbabwe and one occupational programme of a brewery company included five countries (Nigeria, Republic of Congo, Democratic Republic of Congo, Rwanda and Burundi). Twenty-one sites (96%) provided health education and social support, and 18 (82%) provided HIV testing and counselling. All sites encouraged disclosure of HIV infection to spouses and partners, but only 11 (50%) had a protocol for partner notification. Twenty-one sites (96%) supplied male condoms, seven (32%) female condoms and 20 (91%) provided prophylactic ART for the prevention of mother-to child transmission. Seven sites (33%) regularly screened for sexually transmitted infections (STI). Twelve sites (55%) were involved in activities aimed at women or adolescents, and 10 sites (46%) in activities aimed at serodiscordant couples. Stigma and discrimination, gender roles and funding constraints were perceived as the main obstacles to effective prevention in ART programmes. We conclude that preventive services in ART programmes in lower income countries focus on health education and the provision of social support and male condoms. Strategies that might be equally or more important in this setting, including partner notification, prompt diagnosis and treatment of STI and reduction of stigma in the community, have not been implemented widely.

What Does the Market Learn from Stock Offering Revisions?

We examine the disclosure of size revisions of seasoned stock offerings to see what information revisions impart to investros. Revisions could deliver firm-originated infoirmation, which discloses something managers know about the firm. Alternatively, they could disseminate market-originated information, which is information market participants have but which is not conveyed until trading takes place. Our results reject the notion that revisions reveal firm-originated news. Instead, the results are consistent with the market-originated news hypothesis and suggest a mechanism that investros and underwriters use to learn about the demand for an offering.

Wirkmechanismen sozial-interpersoneller Faktoren in einer Stichprobe ehemals politisch Inhaftierter der DDR

Social/interpersonal factors play a central role in PTSD. Previous studies have indicated the specific pathways along which these factors take effect. The study reported here investigates these pathways with reference to a sample of former political prisoners jailed in the GDR. It examines dysfunctional disclosure of traumatic experiences, social acknowledgement, general social support and forgiveness tendencies. For the study N = 86 non-treatment-seeking former political prisoners were recruited (average age 64 years). The instruments employed were the Disclosure of Trauma questionnaire, the Social Acknowledgement questionnaire, the Social Support questionnaire, the Tendency to Forgive scale and the Impact of Event scale (revised). Dysfunctional disclosure was proximally, social acknowledgement distally and general social support and forgiveness indirectly associated with PTSD symptomatologies. The study casts light on potential pathways to posttraumatic adjustment, with special reference to social/interpersonal factors.

Solute transport in crystalline rocks at Äspö — II: Blind predictions, inverse modelling and lessons learnt from test STT1

Based on the results from detailed structural and petrological characterisation and on up-scaled laboratory values for sorption and diffusion, blind predictions were made for the STT1 dipole tracer test performed in the Swedish A¨ spo¨ Hard Rock Laboratory. The tracers used were nonsorbing, such as uranine and tritiated water, weakly sorbing 22Na+, 85Sr2 +, 47Ca2 +and more strongly sorbing 86Rb+, 133Ba2 +, 137Cs+. Our model consists of two parts: (1) a flow part based on a 2D-streamtube formalism accounting for the natural background flow field and with an underlying homogeneous and isotropic transmissivity field and (2) a transport part in terms of the dual porosity medium approach which is linked to the flow part by the flow porosity. The calibration of the model was done using the data from one single uranine breakthrough (PDT3). The study clearly showed that matrix diffusion into a highly porous material, fault gouge, had to be included in our model evidenced by the characteristic shape of the breakthrough curve and in line with geological observations. After the disclosure of the measurements, it turned out that, in spite of the simplicity of our model, the prediction for the nonsorbing and weakly sorbing tracers was fairly good. The blind prediction for the more strongly sorbing tracers was in general less accurate. The reason for the good predictions is deemed to be the result of the choice of a model structure strongly based on geological observation. The breakthrough curves were inversely modelled to determine in situ values for the transport parameters and to draw consequences on the model structure applied. For good fits, only one additional fracture family in contact with cataclasite had to be taken into account, but no new transport mechanisms had to be invoked. The in situ values for the effective diffusion coefficient for fault gouge are a factor of 2–15 larger than the laboratory data. For cataclasite, both data sets have values comparable to laboratory data. The extracted Kd values for the weakly sorbing tracers are larger than Swedish laboratory data by a factor of 25–60, but agree within a factor of 3–5 for the more strongly sorbing nuclides. The reason for the inconsistency concerning Kds is the use of fresh granite in the laboratory studies, whereas tracers in the field experiments interact only with fracture fault gouge and to a lesser extent with cataclasite both being mineralogically very different (e.g. clay-bearing) from the intact wall rock.