The impact of CEO compensation and CEO horizon on a firm's discretionary research and development expenditures

Agency costs are said to arise as a result of the separation of ownership from control inherent in the corporate form of ownership. One such agency problem concerns the potential variance between the time horizons of principal shareholders and agent managers. Agency theory suggests that these costs can be alleviated or controlled through performance-based Chief Executive Officer (CEO) contracting. However, components of a CEO's compensation contract can exacerbate or mitigate agency-related problems (Antle and Smith, 1985). According to the horizon hypothesis, a self-serving CEO reduces discretionary research and development (R&D) expenditures to increase earnings and earnings-based bonus compensation. Agency theorists contend that a CEO's market-based compensation component can mitigate horizon problems. This study seeks to determine whether there is a relationship between CEO earnings- and market-based compensation components and R&D expenditures in the largest United States industrial firms from 1987 to 1993.^ Consistent with the horizon hypothesis, results provide evidence of a negative and statistically significant relationship between CEO cash compensation (i.e., salary and bonus) and the firm's R&D expenditures. Consistent with the expectations of agency theory, results provide evidence of a positive and statistically significant relationship between market-based CEO compensation and R&D.^ Further results of this study provide evidence of a positive and statistically significant relationship between CEO tenure and the firm's R&D expenditures. Although there is a negative relationship between CEO age and the firm's R&D, it was not statistically significant at the 0.5 level. ^

A history of the presidency of National Taiwan University: The relationship between the university and an evolving democratic nation

Higher education always plays an important role in the development of a nation. Taiwan is no exception. Graduates of the National Taiwan University have occupied most of the important positions in this country and today many devote themselves to the development of Taiwan since the central government of the Republic of China (ROC) withdrew from Mainland China and re-located to Taiwan in the winter of 1949. The higher education system in Taiwan, including university and junior colleges, received special attention from the government except from 1945 to 1949 during the transitional period; the time of the early restoration year and the central government's retreating period from Mainland China.^ The five presidents of National Taiwan University who served from 1949 to 1993, Fu Szu-nien, Chien Seu-liang, Yen Chen-Hsing, Yu Chao-chung, and Sun Chen, are the subject of this research. All of the presidents were appointed by the government which established a direct connection between the government and the university leadership. The purpose of this study is to understand how each president balanced politically assigned roles and expectations with personal visionary academic responsiveness to the principles which define the university.^ Each president and his tenure were analyzed using historical research, a developed leadership model, an integration of role theory, Locke's leadership model, Wiles and Bondi curriculum leader tasks, and Burn's leadership style. Results of analyses of documents showed that all presidents of the National Taiwan University were highly respected due to their academic background, personal characteristics, and contribution to the university as a leader. Meanwhile, implementation and achievement of the presidents led to the conclusion that appointed university presidents had significant relationships with government policy. Their leadership style was affected strongly by their personal traits and knowledge and the social and political climate of the time. ^

Nursing faculty intention to use service learning as pedagogy in higher education

The purpose of this study was to identify the factors that motivate nursing faculty to use service learning. The study was based on the theory of planned behavior (TPB), which implies that the target behavior of intention to use service learning in higher education is influenced by the predictor variables of behavior beliefs (attitude), normative beliefs (peer influence), and control beliefs (confidence and resources). External variables were also considered (years of teaching experience, tenure status, and the type of curriculum). ^ Group interviews and a pilot test were conducted to create the instrument for the study, and Cronbach alpha were calculated for survey item reliability. The participants were full time undergraduate nursing faculty members ( n = 160) in the Southeastern United States who taught in universities with accredited nurse education programs. Demographic data as well as scores on scaled survey responses were used to evaluate the intention of nursing faculty to use service learning in their classes. ^ Pearson product moment correlation coefficient and path analysis were applied to the data. The correlation findings indicated that there were statistically significant relationships between behavior beliefs, normative beliefs, and control beliefs and nursing faculty intention to use service learning. The path analysis also indicated that behavior beliefs and normative beliefs were significant, while control beliefs were not a strong influence on intention to use service learning. Normative beliefs showed the strongest direct influence. The use of a community based curriculum also had a positive influence on intention, and faculty with tenure status were more likely to have positive behavior beliefs (attitude) towards service learning. Finally, as teaching experience increased, positive attitudes towards the intention to use service learning decreased. Seventy-nine percent of the variation in the intention to use service learning was explained by the theory of planned behavior, the type of curriculum, teaching experience, and tenure status. These results will assist nursing administration and faculty to design strategies to facilitate the implementation of service learning pedagogy, as well as a community based curriculum which will help meet the 21st century goals set forth from the American Association of Colleges of Nursing. ^

Successful and sustained leadership: A case study of a Jesuit high school president

Fr. Marcelino García, S.J. has been the president of Belen Jesuit Preparatory School for 25 years. The longevity and success of his tenure is an exemplary case of effective leadership and provided significant insight into what constitutes effective school leadership. The target population for this case study consisted of the school’s 7 administrators, 90 faculty members, 10 English-speaking staff members, and 3 key informants. Data were collected using Bolman and Deal’s (1997) Leadership Orientation Survey along with the Jesuit Secondary Education Administration’s (1994) Administrative Leadership Profile Survey (ALPS). Data collected from the surveys were analyzed using the SPSS, version 10. The study also included data collected from focus interviews with Fr. García and six other significant members of the school community. The interviews were approximately 1-hour individual interviews that employed a semi-structured guide. A concurrent triangulation method was used that directly compared the results from these data collection methods. This was done by looking at the data as a whole and in parts. The parts were internal (faculty, administrators, and staff) and external (parents, alumni, and the superior of the Jesuit community) sectors. The comparison of the findings was then examined in terms of each research question. Analysis of the data revealed that while Fr. García’s predominant leadership style reflected the typical Bolman and Deal characteristics associated with the political frame, his leadership demonstrates access to all four frames. Research has found a correlation between multiple frame use and successful leadership. Relatedly, Fr. García’s capacity to approach his administration from various perspectives is indicative of success. In addition, from the perspective of Jesuit education, an analysis of Fr. García’s leadership indicated recurring themes that contributed to the school’s organizational health. The results of this study provide an extensive analysis of the administration of a unique leader. An analysis of Fr. García’s leadership style from two perspectives gives fresh insight into sustained and successful leadership.

Demographic effects of thatch harvest and implications for sustainable use of irapai palm (Lepidocaryum tenue, Mart.), by riverine communities in the Peruvian Amazon

Lepidocaryum tenue Mart. (Arecaceae) is a small, understory palm of terra firme forests of the western and central Amazon basin. Known as irapai, it is used for roof thatch by Amazonian peoples who collect its leaves from the wild and generate income from its fronds and articles fabricated from them. Increasing demand has caused local concern that populations are declining. Cultivation attempts have been unsuccessful. The purpose of this study was to investigate market conditions and quantify population dynamics and demographic responses of harvested and unharvested irapai growing near Iquitos, Peru. ^ Ethnobotanical research included participant surveys to determine movement of thatch tiles, called crisnejas, through Moronacocha Port. I also conducted a seed germination trial, and for four years studied five populations growing in communities with similar topography and soils but different land tenure and management strategies. Stage, survival, leaf production, and reproductive transitions were used to calculate ramet demographic rates and develop population projection matrices. ^ Weavers made an average of 20–30 crisnejas per day (90–130 leaves each), and earned US$0.09 to 0.70 each (US$1.80 to 21.00 per day). Average crisnejas per month sold per vendor was 2,955 with a profit range of US$0.05 to 0.32 per crisneja. Wholesalers worked with capital outlay from US$100 to 400, and an estimated ten to twenty vendors could be found at a given time. Consumers paid between US$0.23 to 1.20 per crisneja. Although differences in demographic rates by location existed, most were not significant enough to attribute to management. ^ After 60 months, mean seed germination rate was 19.5% in all media (37.9% in peat). Seedling survival was less than two percent after twelve months. Annual palm mortality was three percent, and occurred disproportionately in small (<50 cm) palms. Small palms grew more in height. Unharvested palms grew less than harvested palms. Large palms (≥50 cm) produced more leaves, were more likely to reproduce, and collectors harvested them more frequently. Reproductive potentials (sexual and asexual) were low. Population growth rates were greater than or not significantly different from 1.0, indicating populations maintained or increased in size. Current levels of irapai harvest appear sustainable. DNA analysis of stems and recruits is recommended to understand population composition and stage-specific asexual fecundity. ^

Ecophysiology and biomechanics of Equisetum giganteum in South America

Equisetum giganteum L., a giant horsetail, is one of the largest living members of an ancient group of non-flowering plants with a history extending back 377 million years. Its hollow upright stems grow to over 5 m in height. Equisetum giganteum occupies a wide range of habitats in southern South America. Colonies of this horsetail occupy large areas of the Atacama river valleys, including those with sufficiently high groundwater salinity to significantly reduce floristic diversity. The purpose of this research was to study the ecophysiological and biomechanical properties that allow E. giganteum to successfully colonize a range of habitats, varying in salinity and exposure. Stem ecophysiological behavior was measured via steady state porometry (stomatal conductance), thermocouple psychrometry (water potential), chlorophyll fluorescence, and ion specific electrodes (xylem fluid solutes). Stem biomechanical properties were measured via a 3-point bending apparatus and cross sectional imaging. Equisetum giganteum stems exhibit mechanical characteristics of semi-self-supporting plants, requiring mutual support or support of other vegetation when they grow tall. The mean elastic moduli (4.3 Chile, 4.0 Argentina) of E. giganteum in South America is by far the largest measured in any living horsetail. Stomatal behavior of E. giganteum is consistent with that of typical C3 vascular plants, although absolute values of maximum late morning stomatal conductance are very low in comparison to typical plants from mesic habitats. The internode stomata exhibit strong light response. However, the environmental sensitivity of stomatal conductance appeared less in young developing stems, possibly due to higher cuticular conductance. Exclusion of sodium (Na) and preferential accumulation of potassium (K) at the root level appears to be the key mechanism of salinity tolerance in E. giganteum. Overall stomatal conductance and chlorophyll fluorescence were little affected by salinity, ranging from very low levels up to half strength seawater. This suggests a high degree of salinity stress tolerance. The capacity of E. giganteum to adapt to a wide variety of environments in southern South America has allowed it to thrive despite tremendous environmental changes during their long tenure on Earth.

Executive characteristics and going concern opinions

Auditors have come under increased scrutiny over the past several years about the growing number of client failures without a warning in the form of a going-concern modified (GCM) audit opinion. Statement on Auditing Standards No. 59 requires auditors to evaluate whether substantial doubt exists on an audit client’s ability to continue as a going concern (AICPA 1988). My dissertation consists of three essays. ^ For the three essays, I empirically investigate issues related to GCM audit opinions and executive characteristics. Specifically, I examine the impact of executive tenure and gender on the issuance of GCM audit opinions. In addition, my dissertation addresses two other unique issues. Given that the Sarbanes-Oxley Act represents an important watershed event in the history and regulation of the accounting profession, I provide evidence about auditors’ propensities to issue GCM audit opinions in the post-SOX period. Further, I also expand extant research in this area by using multiple outcomes and thus go beyond the traditional use of bankruptcy alone as a tool to evaluate auditors’ GCM opinion. ^ The results indicate that, after controlling for other financial characteristics, GCM audit opinions are significantly more likely for firms that have CFOs with short tenure and/or for firms with a female CFO or CEO. However, when examining the association between executive characteristics and two types of reporting errors, the results vary with the type of reporting error. Overall, the results provide evidence that executive characteristics are associated with auditors' reporting decisions. ^

An examination of Lotka's law in the field of Library and Information Studies

The purpose of this study was to test Lotka’s law of scientific publication productivity using the methodology outlined by Pao (1985), in the field of Library and Information Studies (LIS). Lotka’s law has been sporadically tested in the field over the past 30+ years, but the results of these studies are inconclusive due to the varying methods employed by the researchers. ^ A data set of 1,856 citations that were found using the ISI Web of Knowledge databases were studied. The values of n and c were calculated to be 2.1 and 0.6418 (64.18%) respectively. The Kolmogorov-Smirnov (K-S) one sample goodness-of-fit test was conducted at the 0.10 level of significance. The Dmax value is 0.022758 and the calculated critical value is 0.026562. It was determined that the null hypothesis stating that there is no difference in the observed distribution of publications and the distribution obtained using Lotka’s and Pao’s procedure could not be rejected. ^ This study finds that literature in the field of Library and Information Studies does conform to Lotka’s law with reliable results. As result, Lotka’s law can be used in LIS as a standardized means of measuring author publication productivity which will lead to findings that are comparable on many levels (e.g., department, institution, national). Lotka’s law can be employed as an empirically proven analytical tool to establish publication productivity benchmarks for faculty and faculty librarians. Recommendations for further study include (a) exploring the characteristics of the high and low producers; (b) finding a way to successfully account for collaborative contributions in the formula; and, (c) a detailed study of institutional policies concerning publication productivity and its impact on the appointment, tenure and promotion process of academic librarians. ^

Internal control reporting by non-accelerated filers

I examine three issues related to internal control reporting by non-accelerated filers. Motivation for the three studies comes from the fact that Section 404 of the Sarbanes-Oxley Act (SOX) continues to be controversial, as evidenced by the permanent exemption from Section 404(b) of SOX granted to non-accelerated filers by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Dodd-Frank Act also requires the SEC to study compliance costs associated with smaller accelerated filers. In the first part of my dissertation, I document that the audit fee premium for non-accelerated filers disclosing a material weakness in internal controls (a) is significantly lower than the corresponding premium for accelerated filers, and (b) declines significantly over time. I also find that in the case of accelerated filers remediating clients pay lower fees compared to clients continuing to report internal control problems; however, such differences are not observed in the case of non-accelerated filers. The second essay focuses on audit report lag. The results indicate that presence of material weaknesses are associated with increased audit report lags, for both accelerated and non-accelerated filers. The results also indicate that the decline in report lag following remediation of problems is greater for accelerated filers than for non-accelerated filers. The third essay examines early warnings (pursuant to Section 302 disclosures) for firms that subsequently disclosed internal control problems in their 404 reports. The analyses indicate that non-accelerated firms with shorter CFO tenure, presence of accounting experts on the audit committee, and more frequent audit committee meetings are more likely to provide prior Section 302 warnings. Overall the results suggest that there are differences in internal control reporting between the accelerated and non-accelerated filers. The results provide empirical grounding for the ongoing debate about internal control reporting by non-accelerated filers.

Three essays on corporate governance and meeting-beating or missing analyst forecasts

The beginning of the 21st century was plagued with unprecedented instances of corporate fraud. In an attempt to address apparent non-existent or “broken” corporate governance policies, sweeping measures of financial reporting reform ensued, having specific requirements relating to the composition of audit committees, the interaction between audit committees and external auditors, and procedures concerning auditors’ assessment of client risk. The purpose of my dissertation is to advance knowledge about “good” corporate governance by examining the association between meeting-or-beating analyst forecasts and audit fees, audit committee compensation, and audit committee tenure and “busyness”. Using regression analysis, I found the following: (1) the frequency of meeting-or-just beating (just missing) analyst forecasts is negatively (positively) associated with audit fees, (2) the extent by which a firm exceeds analysts’ forecasts is positively (negatively) associated with audit committee compensation that is predominately equity-based (cash-based), and (3) the likelihood of repeatedly meeting-or-just beating analyst forecasts is positively associated with audit committee tenure and “busyness”. These results suggest that auditors consider clients who frequently meet-or-just beat forecasts as being less “risky”, and clients that frequently just miss as being more “risky”. The results also imply that cash-based director compensation is more successful in preserving the effectiveness of the audit committee’s financial reporting oversight role, that equity-based compensation motivates independent audit committee directors to focus on short-term performance thereby aligning their interests with management, and that audit committee director tenure and the degree of director “busyness” can affect an audit committee member’s effectiveness in providing financial reporting oversight. Collectively, my dissertation provides additional insights regarding corporate governance practices and informs policy-makers for future relevant decisions.^

Three essays on entrepreneurial motivation, entry, exit and monetary rewards

This dissertation analyzes rewards and motivations of self-employment. In light of recent research contributions of Barton Hamilton (2000), which find entrepreneurship not as financially rewarding as wage work, my dissertation attempts to both verify and explain this claim. The first essay proposes a theoretical model of evolution of erroneous earnings expectations on part of a nascent entrepreneur. Inability to observe, survey, and take into account all of the returns to entrepreneurship prior to business entry creates a biased set of beliefs on part of the potential entrants. Using Bayesian learning, a nascent entrepreneur starting out with correct perception of profit distribution arrives at erroneous beliefs by incorporating limited information collected from existing businesses. An observed distribution of surviving businesses would exhibit higher earnings because of previous, unobserved, business failure entrepreneur get an overly positive view of her profit potential. Hence, the chapter offers a unique method of modeling overconfidence. The second essay undertakes dynamic empirical comparison of earnings received by business owners and their wage counterparts. Using Survey of Income and Program Participation (SIPP) I examine both short and long run returns to entrepreneurship comparing theses rewards to wage earners returns. I pay particular attention to transitions into and out of business ownership. I estimate entire earnings distribution. To characterize dynamic aspect of changes to individuals’ earnings I split the income distribution into five income quintiles and follow survey participants over the period of seven years. I find that period-to-period transitions to be Markovian. I find business tenure to be short, business ownership is costly in the short and rewarding in the long run. The third essay considered different reporting schemes applied to the self-employed. It is another empirical investigation of entrepreneurial earning uses Panel Study of Income Dynamics (PSID). I find entrepreneurs while reporting lower than wage workers earnings enjoy significant consumption premiums. I observe evidence of income underreporting by entrepreneurs. This finding suggests a need for better earning comparison metrics and proposes to use consumption rather than income metrics for future comparisons.

A study of the perceived effectiveness of existing recruitment and general institution -wide practices used to enhance women and minority full -time faculty representation at Florida's public universities

As a federal contractor, the State University System of Florida (SUSF) has instituted a wide range of affirmative action practices to hire and promote women and minorities. Should affirmative action be abolished, universities valuing a diverse faculty will have to rely on voluntary practices to attract members of these groups. I explored the present use and perceived effectiveness of recruitment and institution-wide practices used to promote a diverse workforce and identified those practices considered very effective by informed respondents at the nine participating universities. ^ Two questionnaires were used for data collection. Selected recruitment and general institution-wide best practices found in previous studies were used as benchmarks for comparison with existing practices. The questionnaires also included an open-ended question to identify indigenous practices. A follow-up semi-structured interview was conducted to gather information regarding the background of identified practices. ^ Two overall themes emerged from the study. The first was the perception among respondents that women have made substantial gains in faculty representation. This perception is substantiated by actual percentage of women tenure-earning faculty. The second theme was that many of the practices considered very effective are affirmative action-driven, providing women and minorities considerations not afforded White males. These practices, because they single out members of one group over another based on gender and race/ethnicity may become illegal should affirmative action mandates be abolished. ^ Analysis of the data revealed that universities with the highest percentage of practices considered effective and universities located in the most urban areas of the state were the universities with the highest percentage of minority tenure-earning faculty. There appears to be no similar relationship between universities in urban areas and those with the highest percentage of practices considered effective and women tenure-earning faculty representation. The most frequently identified recruitment practice was the development of a receptive institutional image for women and minorities. The most frequently identified practice in promoting a receptive institutional climate was the use of conflict resolution processes and grievance procedures. Five themes also emerged from the 22 barriers in recruiting women and minority full-time faculty identified by the respondents. The most commonly identified barriers were related to a lack of financial resources to support effective practices. ^