CEO compensation, option incentives and information disclosure

This paper examines the impact of information disclosure on the valuation of CEO options and the incentives created by those options. Prior executive compensation research in the US has made assumptions about key input variables that can affect the calculation of option values and financial incentives. Accordingly, biases may have ensued due to incomplete information disclosure about noncurrent option grants. Using new data on a sample of UK CEOs, we value executive option holdings and incentives for the first time and estimate the levels of distortion created by the less than complete US-style disclosure requirements. We also investigate the levels of distortion in the UK for the minority of companies that choose to reveal only partial information. Our results suggest that there have to date been few economic biases arising from less than complete information disclosure. Furthermore, we demonstrate that researchers using US data, who made reasonable assumptions about the inputs of noncurrent option grants, are unlikely to have made significant errors when calculating CEO financial incentives or option wealth. However, the recent downturn in the US stock market could result in the same assumptions, producing exaggerated incentive estimates in the future.

The disclosure of directors' share option information in UK companies

This paper considers the empirical determinants of the quality of information disclosed about directors’ share options in a sample of large companies in 1994 and 1995. Policy recommendations, consolidated in the recommendations of the Greenbury report, argue for full and complete disclosure of director option information. In this paper two modest contributions to the UK empirical literature are made. First, the current degree of option information disclosure in the FTSE 350 companies is documented. Second, option information disclosure as a function of variables that are thought to in¯uence corporate costs of disclosure is modelled. The results have implications for corporate governance. Speci®cally, support is oVered for the monitoring function of nonexecutive directors. In addition, nondisclosure is found to be related to variables which proxy proprietary costs of revealing information (such as company size).

Measuring accounting disclosure in a period of complex changes:the case of Egypt

Significant changes in accounting disclosure are observed in periods of economic change such as those relating to emerging capital markets and programs of privatization. Measurement of the level of accounting disclosure should ideally be designed to capture the complexity of change in order to give insight and explanation to match the causes and consequences of change. This paper shows the added interpretive value in subdividing the disclosure checklist to reflect the requirements of national accounting regulations, the location of disclosure items in the annual report, and limitations on the availability of regulations in official translation to the local language. Defining targeted disclosure categories leads to significance testing of specific aspects of changes in accounting disclosure in the Egyptian capital market in the 1990s. Strong correlation of disclosure with the presence of majority government ownership of the company and the relative activity of share trading supports the applicability of political costs and capital need theories, respectively. The relation between International Accounting Standards (IASs) disclosure and the type of audit firm points to additional theoretical explanations, including relative familiarity with the legislation and compliance features identifiable with the emerging capital market. The approach described in this paper has the potential for enhancing understanding of the complexity of accounting change in other emerging capital markets and developing economies.

What's in a broken promissory obligation? Developing and testing a multiple component form measure of psychological contract breach

While the literature has suggested the possibility of breach being composed of multiple facets, no previous study has investigated this possibility empirically. This study examined the factor structure of typical component forms in order to develop a multiple component form measure of breach. Two studies were conducted. In study 1 (N = 420) multi-item measures based on causal indicators representing promissory obligations were developed for the five potential component forms (delay, magnitude, type/form, inequity and reciprocal imbalance). Exploratory factor analysis showed that the five components loaded onto one higher order factor, namely psychological contract breach suggesting that breach is composed of different aspects rather than types of breach. Confirmatory factor analysis provided further evidence for the proposed model. In addition, the model achieved high construct reliability and showed good construct, convergent, discriminant and predictive validity. Study 2 data (N = 189), used to validate study 1 results, compared the multiple-component measure with an established multiple item measure of breach (rather than a single item as in study 1) and also tested for discriminant validity with an established multiple item measure of violation. Findings replicated those in study 1. The findings have important implications for considering alternative, more comprehensive and elaborate ways of assessing breach.

Corporate governance disclosure in the Gulf countries

Corporate governance disclosure is important for countries aiming to attract international investors and reduce companies’ cost of capital. The relationship between corporate governance disclosure (CGD) and its determinants is the main objective of the current research. Accordingly, the research aimed to: (i) assess CGD level in the Gulf countries; (ii) investigate the impact of ownership structure (proportion of institutional, governmental, managerial and family ownership) on CGD; (iii) explore the effect of board characteristics (proportion of independent board members, proportion of family members on board, CEO/chairman duality and board size) on CGD; (iv) examine the relationship between diversity (proportion of foreign and female members on a board and in the senior management team) and CGD; and (v) test the association between firm characteristics (company size, age, liquidity, profitability, leverage, industry and auditor types) and CGD. Gulf countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) were selected for the study since they share similar characteristics and represent a relatively homogeneous category in the Middle East and North African region. A CGD index of 232 items was developed and divided into six categories: ownership structure and investor rights; financial transparency and information disclosure; information on auditors; board and senior management structure and process; board committees; and finally corporate behaviour and responsibility. Annual reports available for listed non-financial companies of the Gulf countries were 270 for the year 2009. The maximum CGD level was 63%, whereas the minimum was 5%, with an average disclosure level of 32%. Several regression models were conducted to enhance the robustness of the results and conclusions of the study. The results indicated that five variables had a significant positive relationship with CGD: proportion of independent members on a board, proportion of foreign members on a board, proportion of foreign members in the senior management team, auditor type and profitability. The research contributes to the literature on corporate governance voluntary disclosure in developing countries. Practical contributions consist of several recommendations to policy makers, regulators, and professional institutions in the Gulf countries.

“Learning the Ropes”: An Exploration of BDSM Stigma, Identity Disclosure, and Workplace Socialization

Relationship development is a key factor for workplace socialization. People with stigmatized identities often choose to (not) disclose experiences or identities due to potential consequences. A perceived need to not disclose stigmatized, BDSM-related activities or identities can restrict relationship development at work, which should concern human resource development professionals.

Variables affecting government debt: A comparison of certificates of participation, tax -exempt revenue bonds and tax -exempt general obligation bonds

This dissertation analyzed and compared variables affecting interest rate and yield of certificates of participation, tax-exempt revenue bonds and tax-exempt general obligation bonds. The study employed qualitative and quantitative analysis methods. ^ Qualitative research methods included surveys, interviews and focus groups. The survey solicited debt load information from 67 Florida school districts (21 responded) and addressed the question which districts used certificates of participation and why. Eight individuals with experience dealing with all three debt instruments were interviewed. A follow-up focus group of six school district financial officers gathered additional data. Results from the qualitative methods revealed school districts used certificates of participation based on millage authority amount available relative to overall tax base. Also identified was the belief of a significant difference in certificates of participation costs and the other two debt instrument types. ^ The study's quantitative methods analyzed 1998 and 1999 initial issues of Moody's AAA rated certificates of participation, tax-exempt revenue bonds and tax-exempt general obligation bonds. Through an analysis of covariance (ANCOVA), the study examined interest rates and yields while controlling for the covariates of credit enhancement, issue size, and maturity date. The analysis identified no significant difference between interest rates of certificates of participation and tax-exempt general obligation bonds (p < 0.05). There was a significant difference between interest rates of tax-exempt revenue bonds and tax-exempt general obligation bonds. This study discerned no significant difference between yield on certificates of participation and tax-exempt general obligation bonds. It identified a difference in yield between both certificates of participation and tax-exempt general obligation bonds compared with tax-exempt revenue bonds. ^ The study found COPs to have lesser overall costs than RV bonds. COPs also have a quicker entry into the market resulting in construction cost savings. The study found policy implications such as investment portfolio limitations and public choice issues about using COPs as a mechanism to grow government. ^

Disclosure of publically known events: banking on bad memory?

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Age and Life Course Location as Interpretive Resources for Decisions Regarding Disclosure of HIV to Parents and Children: Findings from the HIV and Later Life Study

Studies of disclosure among older people living with HIV (PLWH) are uninformed by critical social-gerontological approaches that can help us to appreciate how older PLWH see and treat age as relevant to disclosure of their HIV status. These approaches include an ethnomethodologically-informed social constructionism that explores how ‘the’ life course (a cultural framework depicting individuals’ movement through predictable developmental stages from birth to death) is used as an interpretive resource for determining self and others’ characteristics, capacities, and social circumstances: a process Rosenfeld and Gallagher (2002) termed ‘lifecoursing’. Applying this approach to our analysis of 74 life-history interviews and three focus groups with older (aged 50+) people living with HIV in the United Kingdom, we uncover the central role that lifecoursing plays in participants’ decision-making surrounding disclosure of their HIV to their children and/or older parents. Analysis of participants’ accounts uncovered four criteria for disclosure: the relevance of their HIV to the other, the other’s knowledge about HIV, the likelihood of the disclosure causing the other emotional distress, and the other’s ability to keep the disclosed confidential. To determine if these criteria were met in relation to specific children and/or elders, participants engaged in lifecoursing, evaluating the other’s knowledge of HIV, and capacity to appropriately manage the disclosure, by reference to their age. The use of assumptions about age and life-course location in decision-making regarding disclosure of HIV reflects a more nuanced engagement with age in the disclosure decision-making process than has been captured by previous research into HIV disclosure, including on the part of people aging with HIV.

De Relatie tussen Angst- en Stemmingsklachten en Self-disclosure: het Effect van Emotie-inhibitie en Mindfulness

Angst- en stemmingsklachten worden geassocieerd met verminderde self-disclosure. Met self-disclosure wordt zelfonthulling van ervaren emoties bedoeld. Dit speelt een rol bij zelfacceptatie en zelfinzicht, en is belangrijk bij gesprekstherapie. Deze studie onderzocht of emotie-inhibitie de negatieve relatie tussen angst- en stemmingsklachten en self-diclosure verklaart, en of de relatie gunstig te beïnvloeden is door mindfulness. Het effect van mindfulness op deze relatie was nog niet eerder onderzocht. Deelnemers waren 99 vrouwen van 24 t/m 74 jaar (M = 44.60, SD = 10.55) en 26 mannen van 26 t/m 77 jaar (M = 48.27, SD = 12.68), afkomstig uit de normale Nederlands populatie. Het onderzoeksontwerp betrof een cross-sectioneel online vragenlijstonderzoek, waarbij gebruik gemaakt werd van de Symptom Checklist (Arrindel & Ettema, 1986), Emotional Self-Disclosure Scale (Snell, Miller, & Belk, 1988), Emotion Regulation Questionnaire (Gross & John, 2003) en Five Factor Mindfulness Questionnaire – Short Form (Bohlmeijer, Ten Klooster, Fledderus, Veehof, & Baer, 2011). Resultaten tonen, conform bestaande literatuur, dat angst- en stemmingsklachten negatief samenhangen met self-disclosure. Emotie-inhibitie heeft echter géén mediatie-effect en mindfulness heeft géén moderatie-effect op de negatieve relatie tussen angst- en stemmingsklachten en self-disclosure. Mindfulness heeft wel mediatie-effect op deze relatie. Mindfulness hangt hierbij positief samen met self-disclosure. De relevantie van de bevindingen is vooral praktisch: om mensen met angst- en stemmingsklachten te stimuleren over hun emoties te praten zou mindfulness aangewend kunnen worden.