Shareholder Value Maximization: What Managers Say and What They Do

This paper examines whether Swiss firms maximize shareholder value. To find out, we survey the goals of 313 listed and unlisted firms. We then examine whether managers’ decisions are consistent with their goals and analyze whether performance corresponds to intentions. Our results show that most managers pursue conflicting targets. Many also declare that they do not maximize shareholder value. And those who claim they do sometimes rely on investment criteria that are inconsistent with that target. Finally, we find that share-price performance is marginally better when managers claim to maximize shareholder value, particularly when stock prices have fallen.

Say on Pay: ein Überblick über Gestaltungsoptionen, ökonomische Konsequenzen und Erkenntnisse aus Empirie und Laborexperimenten

Unter dem Stichwort Say on Pay (SoP) haben in den letzen Jahren die meisten Länder der EU und die USA den Aktionären Abstimmungsrechte im Zusammenhang mit der Vergütung des Top-Managements eingeräumt. Zwischen den einzelnen Ländern bestehen jedoch erhebliche Unterschiede hinsichtlich der konkreten Ausgestaltung des SoP. Dieser Beitrag diskutiert die Wirkungen unterschiedlicher Gestaltungsoptionen des SoP auf die Anreizgestaltung und den Nutzen des Managements und der Aktionäre im Rahmen eines einfachen linearen Agency Modells. Dabei erweisen sich das vorvertragliche bindende SoP und das bedingt verpflichtende, nachvertragliche bindende SoP gegenüber den anderen untersuchten Varianten als überlegen. Während das konsultative SoP an seiner mangelnden Durchsetzbarkeit leidet, bietet das nachvertragliche bindende SoP Anreize für opportunistisches Verhalten auf Seiten der Aktionäre und führt deshalb zu Wohlfahrtsverlusten. In Ergänzung der Modellanalyse wird ein Überblick über die wichtigsten empirischen und experimentellen Studien zum Thema SoP gegeben und deren Inhalt im Lichte der Modellergebnisse diskutiert. Most countries of the European Union as well as the US recently introduced shareholder votes on the remuneration of executives, also referred to as “Say on Pay” (SoP). Interestingly, legislators in different jurisdictions opted for quite dissimilar voting right regimes. We provide an overview of the main regulatory approaches and discuss the potential impact of variations in SoP design on the structure of compensation contracts and the utility of shareholders and executives. We find that pre-contractual SoP and conditional post-contractual SoP with binding consequences are in the best interest of shareholders. By contrast, advisory SoP typically suffers from lacking enforceability. We also find that post-contractual SoP with binding consequences results in efficiency losses because it fuels moral hazard on the part of shareholders. We complement the theoretical analysis with a discussion of recent empirical and experimental studies on Say on Pay.

How Welfare States Shape the Democratic Public: Policy Feedback, Participation, Voting and Attitudes

This crucial volume significantly advances the study of policy feedbacks. With contributions from many subfields and methodological approaches, it offers both sophisticated theorizing and new empirical examples that show how policies make politics in a variety of ways. Innovative research designs provide more convincing inference than ever. And the normative questions engaged about welfare performance, evaluation, participation, and accountability could not be more important or timely in this era of austerity and discord over the future of welfare states.’

Minimizing the Threat of a Positive Majority Deficit in Two-tier Voting Systems with Equipopulous Units

The mean majority deficit in a two-tier voting system is a function of the partition of the population. We derive a new square-root rule: For odd-numbered population sizes and equipopulous units the mean majority deficit is maximal when the member size of the units in the partition is close to the square root of the population size. Furthermore, within the partitions into roughly equipopulous units, partitions with small even numbers of units or small even-sized units yield high mean majority deficits. We discuss the implications for the winner-takes-all system in the US Electoral College.

Moral Politics: The Religious Factor in Referenda Voting

This article combines the research strands of moral politics and political behavior by focusing on the effect of individual and contextual religiosity on individual vote decisions in popular initiatives and public referenda concerning morally charged issues. We rely on a total of 13 surveys with 1,000 respondents each conducted after every referendum on moral policies in Switzerland between 1992 and 2012. Results based on cross-classified multilevel models show that religious behaving instead of nominal religious belonging plays a crucial role in decision making on moral issues. This supports the idea that the traditional confessional cleavage is replaced by a new religious cleavage that divides the religious from the secular. This newer cleavage is characterized by party alignments that extend from electoral to direct democratic voting behavior. Overall, our study lends support to previous findings drawn from American research on moral politics, direct democracies, and the public role of religion.