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.

Being optimally aroused matters: Effects of a weak stress manipulation on children’s executive functions are moderated by temperament and age

We tested a core assumption of the bidirectional model of executive function (EF) (Blair & Ursache, 2011) indicating that EF is dependent on arousal. From a bottom-up perspective the performance on EF tasks is assumed to be curvilinearly related to arousal, with very high or low levels of arousal impairing EF. N = 107 4-and 6-year-olds’ performance on EF tasks was explored as a function of a weak stress manipulation aiming to raise children’s emotional arousal. EF (Stroop, Flanker, Go/no-go, and Backwards Color Recall) was assessed and stress was induced in half of the children by imposing a mild social evaluative threat. Furthermore, children’s temperament was assessed as a potential moderator. We found that stress effects on children’s EF performance were moderated by age and temperament: 4-year-olds with high Inhibitory Control and high Attentional Focusing were negatively affected by the stressor. However, it is unclear whether these effects were mediated by self-reported arousal. Our findings disconfirmed the hypotheses that adverse effects of the stressor are particularly high in children high on emotional reactivity aspects of temperament and low on self-regulatory aspects of temperament. Further, 6-year-olds did not show any stress effects. Results will be discussed within the framework of the Yerkes-Dodson law and with regard to stress manipulations in children.

Prospective Memory, Retrospective Memory, Executive Functions, and Metacognition: How they are linked longitudinally in young elementary school children

Succeeding in everyday activities often requires executive functioning (EF), metacognitive abilities (MC) and memory skills such as prospective memory (PM) and retrospective memory (RM). These cognitive abilities seem to gradually develop in childhood, possibly influencing each other during development. From a theoretical point of view, it is likely that they are closely interrelated, especially in children. Their empirical relation, however, is less clear. A model that links these cognitive abilities can help to better understand the relation between PM and RM and other cognitive processes. In this project we studied the longitudinal development of PM, RM, EF, and MC in 7-8 year old elementary school children across half a year. 119 second graders (MT1 = 95 months, SDT1, = 4.8 months) completed the same PM, RM, EF and MC tasks twice with a time-lag of 7 months. The developmental progression was analysed using paired t-tests, the longitudinal relationships were analysed using confirmatory factor analysis and all fit indices are in accordance with Hu and Bentler (1998). In general, performance improved significantly (ps < .001) and effect sizes ranged from .45 to .62 (Cohen’s d). CFA revealed a good model fit, c2(227, 119) = 242.56, p = .23, TLI = .973, CFI = .979, RMSEA = .024. At T1, significant cross-sectional links were found between PM T1 and RM T1, between PM T1 and EF T1, and between EF T1 and MC T1. Moreover, significant longitudinal links were found between EFT1 and PMT2 and between EFT1 and MCT2; EF T1 and RM T2 were marginally linked. Results underline previous findings showing that PM, RM, EF, and MC develop significantly during childhood, even within this short time period. Results also indicate that these cognitive abilities are linked not only cross-sectionally, but longitudinally. Most relevant, however, is the predictive role of EF for both metacognition and memory.

Longitudinal relationships between prospective memory, executive functions, and metacognition in young elementary school children

Prospective Memory (PM), executive functions (EF) and metacognition (MC) are relevant cognitive abilities for everyday functioning. They all seem to develop gradually in childhood and appear to be theoretically closely related; however, their empirical links remain unclear, especially in children. As a recent study revealed significant cross-sectional links between PM and EF, and a weaker but close link between PM and MC in 2nd graders (Spiess, Meier, & Roebers, submitted), this study focused on their short-term relationships and on their development. 119 children (MT1 =95 months, SDT1, = 4.8 months) completed the same tasks (one PM, three EF, one MC task) twice with a time-lag of 7 months. T-tests showed significant improvements in all tasks, except in the updating task. Different structural equation models were contrasted (AMOS); the best fitting model revealed that PMT2 was similarly predicted by PMT1 (r = .33) and EFT1 (r = .34). Additionally, EFT1 predicted MCT2 (r = .44), chi2(118, 119) = 128.91, p = .23, TLI = .968, CFI = .978, RMSEA = .028. Results show that PM, EF, and MC develop during childhood and also demonstrate that they are linked not only cross-sectionally, but longitudinally. Findings are discussed in a broader developmental framework.

Do executive dysfunction and freezing of gait in Parkinson's disease share the same neuroanatomical correlates?

Current hypotheses postulate a relationship between executive dysfunction and freezing of gait (FOG) in Parkinson's disease (PD). Hitherto, most evidence comes from entirely clinical approaches, while knowledge about this relationship on the morphological level is sparse. The aim of this study was therefore to assess the overlap of gray matter atrophy associated with FOG and executive dysfunction in PD. We included 18 PD patients with FOG and 20 without FOG in our analysis. A voxel-based morphometry approach was used to reveal voxel clusters in the gray matter which were associated with FOG and executive dysfunction as measured by the Frontal Assessment Battery, respectively. Conjunction analysis was applied to detect overlaps of the associated patterns. FOG correlated with different cortical clusters in the frontal and parietal lobes, whereas those associated with the FAB scores were, although widespread, widely confined to the frontal lobe. Conjunction analysis revealed a significant cluster of gray matter loss in the right dorsolateral prefrontal cortex. We could show that the patterns of neurodegeneration associated with FOG and executive dysfunction (as measured by the FAB) share atrophic changes in the same cortical areas. However, there is also a considerable number of cortical areas where neurodegenerative changes are only unique for either sign. Particularly, the involvement of parietal lobe areas seems to be more specific for FOG.

The effects of qualitatively different acute physical activity interventions in real-world settings on executive functions in preadolescent children

There is growing evidence indicating a positive effect of acute physical activity on cognitive performance in children. Most of the evidence originates, however, from studies in highly controlled laboratory settings. The aim of the present study was to investigate whether the same effects can be found in more real-world settings. We examined the effects of qualitatively different acute physical activity interventions on the three core dimensions of executive functions (updating, inhibition, shifting). In an experimental between-subject design, 219 ten to twelve year-olds were assigned to one of four conditions which varied systematically in physical activation and cognitive engagement. Executive functions were measured before and immediately after the intervention. Contrary to the hypothesis, no effects of acute physical activity with and without cognitive engagement were found on executive functions in the overall sample. Only children with higher fitness and/or higher academic achievement benefitted from the interventions in terms of their updating performance. Thus, the results indicate that it may be more difficult to attain positive effects through acute physical activity in real-world settings than in laboratory settings and that physiological and cognitive requirements may have to be adjusted to individual capacity to make an intervention effective.

Linking executive functions and procedural metacognition

Traditionally, researchers have discussed executive function and metacognition independently. However, more recently, theoretical frameworks linking these two groups of higher order cognitive processes have been advanced. In this article, we explore the relationship between executive function and procedural metacognition, and summarize theoretical similarities. From a developmental perspective, the assumed theoretical resemblances seem to be supported, considering development trajectories and their substantial impact on areas that include learning and memory. Moreover, empirical evidence suggests direct relationships on the task level, on the level of latent variables, and in terms of involved brain regions. However, research linking the two concepts directly remains rare. We discuss evidence and developmental mechanisms, and propose ways researchers can investigate links between executive function and procedural metacognition.

Executive Managers in Peru's Family Businesses

As in many other developing countries, family businesses are major players in the Peruvian economy. Despite their growth into large-scale groups spanning a wide range of businesses, the owner families still have strong control over their ownership and management. However, Peru's liberal economic reforms in the 1990s brought intense competition into the national market. Not only have these family businesses been forced to compete against large-scale foreign capital that entered the national market through the privatization of state enterprises, but also against cheap goods imported from foreign countries. In order to compete, family businesses have had to move beyond the limited human resources available within the family. The advancement within owner families of new generations with better education and training together with the promotion to top managerial positions of professional salaried managers from outside the family are some of the measures owner families are taking to overcome their human resource limitations.

Leadership in executive women from the viewpoint of project management competences: a study in the region of Madrid / Liderazgo de la mujer directiva desde las competencias para la dirección de proyectos: estudio en la región de Madrid

Today's knowledge society is creating increasingly competitive environments in which cognitive factors, creativity, knowledge and information determine the success of organizations. In this context the exercise of management and leadership is essential to achieve objectives, goals and relationships. Both concepts have been historically associated with the male domain because of the underrepresentation of women in managerial positions. However, the increasing participation of women in the workplace has led to the development of an extensive literature on the possible existence of differences between the styles of male and female leadership, although it has not been addressed from the analysis of competences associated with each sex. Through a participatory process the abilities and skills associated with women managers are analyzed, the differences in leadership styles and the barriers that still exist for the promotion of women into management positions. The results indicate that women particularly value the skills associated with human relationships, the female leadership style tends to be transformational and that there are still barriers to their advancement to management positions.

Leadership and project management competences in executive women: different styles from the agents' perceptions

The exercise of management and leadership are key aspects to achieve objectives, goals and relationships in the current knowledge society marked by increasingly competitive environments in which cognitive factors, creativity, knowledge and information determine the success of organizations. Both concepts have been historically associated with the male domain because of the underrepresentation of women in managerial positions. However, the increasing participation of women in the workplace has led to the development of an extensive literature on the possible existence of differences between the styles of male and female leadership, although it has not been addressed from the analysis of competences associated with each sex. Through a participatory process the abilities and skills related to women managers are analyzed and the differences in leadership styles. The results indicate that women particularly value the skills associated with human relationships, and that female leadership style tends to be transformational.

Europeanization and the inclusive strategies of executive actors

In Europeanized policy domains, executive actors are considered especially powerful because they are directly responsible for international negotiations. However, in order to avoid failing in the ratification process, they are also highly dependent on the support of domestic, non-state actors. We argue that in Europeanized decision-making processes, state actors are not passively lobbied, but actively seek collaboration with - and support from - domestic actors. We apply stochastic actor-based modelling for network dynamics to collaboration data on two successive bilateral agreements on the free movement of persons between Switzerland and the European Union (EU). Results confirm our hypotheses that state actors are not passively lobbied, but actively look for collaboration with other actors, and especially with potential veto players and euro-sceptical actors from both the conservative Right and the Left.

Mental playmates: Siblings, executive functioning and theory of mind

This study assessed the theory of mind (ToM) and executive functioning (EF) abilities of 124 typically developing preschool children aged 3 to 5 years in relation to whether or not they had a child-aged sibling (i.e. a child aged 1 to 12 years) at home with whom to play and converse. On a ToM battery that included tests of false belief, appearance-reality (AR) and pretend representation, children who had at least 1 child-aged sibling scored significantly higher than both only children and those whose only siblings were infants or adults. The numbers of child-aged siblings in preschoolers' families positively predicted their scores on both a ToM battery (4 tasks) and an EF battery (2 tasks), and these associations remained significant with language ability partialled out. Results of a hierarchical multiple regression analysis revealed that independent contributions to individual differences in ToM were made by language ability, EF skill and having a child-aged sibling. However, even though some conditions for mediation were met, there was no statistically reliable evidence that EF skills mediated the advantage of presence of child-aged siblings for ToM performance. While consistent with the theory that distinctively childish interaction among siblings accelerates the growth of both TOM and EF capacities, alternative evidence and alternative theoretical interpretations for the findings were also considered.

Deploying internet commerce in lottery businesses:an executive guideline

Commerce is essentially the exchange of goods and services in various forms between sellers and buyers, together with associated financial transactions. Electronic Commerce (EC) is the process of conducing commerce through electronic means, including any electronic commercial activity supported by IT (information technology) (Adam and Yesha, 1996; Kambil, 1997; Yen, 1998). In this sense, EC is not totally new. Industries have used various EC platforms such as advertising on TV and ordering by telephone or fax. Internet Commerce (IC), or Web Commerce, is a specific type of EC (Maddox, 1998; Minoli D. and Minoli E., 1997). While some traditional EC platforms such as TV and telephone have been used to build “TV-gambling” and “telephone-betting” systems for conducting lottery business, Internet Lottery Commerce (ILC) has been assessed as the most promising type of EC in the foreseeable future. There are many social and moral issues relating to the conduct of lottery business on-line. However, this chapter does not debate these but deals only with business and technology issues. The purpose of this chapter is to provide a structured guide to senior executives and strategic planners who are planning on, or interested in, ILC deployment and operation. The guide consists of several stages: (1) an explanation of the industry segment’s traits, value chain, and current status; (2) an analysis of the competition and business issues in the Internet era and an evaluation of the strategic resources; (3) a planning framework that addresses major infrastructure issues; and (4) recommendations comprising the construction of an ILC model, suggested principles, and an approach to strategic deployment. The chapter demonstrates the case for applying the proposed guideline within the lottery business. Faced with a quickly changing technological context, it pays special attention to constructing a conceptual framework that addresses the key components of an ILC model. ILC fulfils the major activities in a lottery commerce value chain—advertising, selling and delivering products, collecting payments for tickets, and paying prizes. Although the guideline has been devised for lottery businesses, it can be applied to many other industry sectors.

Corporate tournaments and executive compensation: evidence from the UK

This study tests the implications of tournament theory using data on 100 U.K. stock market companies, covering over 500 individual executives, in the late 1990s. Our results provide some evidence consistent with the operation of tournament mechanisms within the U.K. business context. Firstly, we find a convex relationship between executive pay and organizational level and secondly, that the gap between CEO pay and other board executives (i.e., tournament prize) is positively related to the number of participants in the tournament. However, we also show that the variation in executive team pay has little role in determining company performance.

The core executive's approach to regulation:from 'better regulation' to 'risk-tolerant deregulation'

This article examines changes in the New Labour core executive’s approach to regulation and its relationship with risk, through analysing documentary, legislative and press sources concerning approaches to regulatory decision-making. It claims that an initial commitment to ‘better regulation’ has gradually been replaced by explicit support for deregulation. A reduction in the scope of regulation was also promoted by the Thatcher and Major governments. The New Labour core executive shares previous (Conservative) administrations’ concern to include business in deregulatory decision-making. However, the article claims that there is one significant difference in the New Labour deregulatory approach: a new toleration of risk. Deregulation is, now, described as a corrective to regulators’ over-reactions to perceived risks, which, it is claimed, are holding back economic and technological progress. However, this new approach excludes competing views concerning how risk should be regulated. In particular, it does not engage with widespread popular views that governments should continue to protect against risk.