Executive Stock Ownership and Performance: Tracking Faint Traces

We examine the relation between managers' financial interests and firm performance. Since the relation could go in either direction, we cast the analysis in a simultaneous equations framework. For firms involved in acquisitions, we find that acquisition performance and Tobin's Q ratios affect the size of managers' stockholdings. We find no evidence, however, that larger stockholdings lead to better performance. Perhaps management is effectively disciplined by competition in product and labor markets. Alternatively, it may not be necessary for top executives to own stock to the residual claimants. And finally, higher ownership might multiply the opportunities to appropriate corporate wealth.

Executive compensation and the performance of the firm

A sample of large industrial corporations is examined to determine whether there is a relationship between the levels of compensation received by the senior executives of those firms and the firms' economic performances. We find consistent evidence of such a relationship, with differences across firms in the total compensation of their three highest-paid officers being positively related to differences in both the common stock returns and operating profitability of the firms. The implication is that compensation packages are designed to reduce agency costs.

Mergers, executive risk reduction and stockholder wealth

Among the possible consequences of agency problems between owners and managers is a tendency by managers to make investment decisions for their firms that are deliberately aimed at reducing firm risk, as a means to control managers' personal wealth risk. The literature has suggested that such behavior may occur to the detriment of shareholder wealth, and that mrgers may be a particular class of investment decisions for which the behavior would be observable. We test these hypotheses empirically, but find no evidence from our merger sample that risk reduction for the aqquiring firm is the typical outcome nor that, when it occurs, it is differentially costly for shareholders.

Executive compensation and executive incentive problems: an empirical analysis

The question of whether the design of the corporate executive pay package reflects an attempt to reduce agency costs between shareholders an managers is adressed. The components of senior executive pay are found to vary systematically across firms in a manner that cannot easily be explained by tax effects, and which would indicate that individual elements of pay are aimed at controlling for limited horizon and risk exposure problems. Managerial decisions and the structure of managerial pay therefore appear to be interrelated.

Merger decisions and executive stock ownership in acquiring firms

This study supports the proposition that managerial welfare affects merger decisions. The abnormal stock returns experienced by bidder firms, from the time of the announcement of a merger bid through the stockholder approval date, are positively relaterd to the percentage of own-company stock held by the senior management of the bidder. The results suggest that substantial amounts of own-company share ownership help align the interests of stockholders and management.

Influence of Gestational Age and Parental Education on Executive Functions of Children Born Very Preterm

Background: Children born very preterm (<32 weeks’ gestational age; VPT) and/or very low birth weight (<1500 g; VLBW) are at high risk of deficits in executive functions, namely inhibition, working memory, and shifting. Both, gestational age and socioeconomic factors, such as parental education, are known to influence executive functions, with children born at lower gestational age and with lower educated parents displaying worse executive skills. This study aimed to investigate if maternal and paternal education moderated the relationship between gestational age and executive functions in VPT/VLBW children aged 8-12 years. It was hypothesised that the disadvantageous effect of low gestational age could be buffered more easily in families with higher educational background. Methods: Sixty VPT/VLBW children born in the cohort of 1998-2003 were recruited. All children completed executive function tasks (inhibition, working memory, and shifting). Results: There was a significant dose-response-relationship between gestational age and inhibition, with children being born at earlier gestational age showing worse inhibition. However, neither maternal nor paternal education moderated the relationship between gestational age and executive functions significantly. Conclusion: children than parental education. The disadvantageous effect of low gestational age was equal in children with higher and lower educated parents. However, the impact of gestational age and parental education on executive functions may differ depending on the socioeconomic spectrum of the study sample.

Language and executive functioning: Children’s benefit from induced verbal strategies in different tasks

The interplay of language and cognition in children’s development has been subject to research for a long time. The present study followed up on recently reported deleterious effects of articulatory suppression on children’s executive functioning (Fatzer & Roebers, 2012), aiming to provide more empirical evidence on the differential influence of language on executive functioning. In the present study, verbal strategies were induced in three executive functioning tasks. The tasks were linked to the three central executive functioning dimensions of updating (Complex Span task), shifting (Cognitive Flexibility task) and inhibition (Flanker task). It was expected that the effects of the verbal strategy instruction would counter the results of articulatory suppression and thus be strong in the Complex Span task, weak but present in the Cognitive Flexibility task and small or nonexistent in the Flanker task. N = 117 children participated in the study, with n = 39 four-year-olds, n = 38 six-year-olds, and n = 40 nine-year-olds. As expected, results revealed a benefit from induced verbal strategies in the Complex Span and the Cognitive Flexibility task, but not in the Flanker task. The positive effect of strategy instruction declined with increasing age, pointing to more frequent spontaneous and self-initiated use of verbal strategies over the course of development. The effect of strategy instruction in the Cognitive Flexibility task was unexpectedly strong in the light of the only small detrimental effect of articulatory suppression in the preceding study. Implications for language’s involvement in the different executive functioning dimensions and for practice are discussed.

Executive functions and their differential contribution to sustained attention in 5- to 8-year-old children

ABSTRACT Everyday routine in general and school settings in particular make high demands on children's abilities to sustain their focus of attention over longer time periods. School tasks thus require the child to accomplish the task on an appropriate level of performance while maintaining the focus of attention even under repetitious or distracting conditions. However, sustained attention (SA) may be a more heterogeneous construct than commonly assumed as it requires the individual not only to sustain attentional capacities but also to store and maintain the task rule (working memory), to inhibit inappropriate responses (inhibition), and to switch according to requirements (switching). It might thus involve processes counted among executive functions (EF). In the present study, performance in EF tasks (covering the core components inhibition, switching, and working memory) and in a SA task was assessed in 118 children, aged between 5;0 and 8;11 years. Similar age-dependent performance trajectories were found in EF components and SA, indicating ongoing performance improvements between 5 until at least 8 years of age in SA and in EF. Interrelations between single EF components and SA showed to be small to moderate. Finally, different patterns of SA performance predictions were found in age-homogeneous subgroups with inhibition being crucial for SA performance in the youngest and switching in the oldest age group. Taken as a whole, even though similarities in assumed developmental trajectories and substantial interrelations point to common underlying processes in EF and SA, age-dependent patterns of explained variance indicate clear discriminability.

Personality factors in elementary school children: Contributions to academic performance over and above executive functions?

Unique contributions of Big Five personality factors to academic performance in young elementary school children were explored. Extraversion and Openness (labeled “Culture” in our study) uniquely contributed to academic performance, over and above the contribution of executive functions in first and second grade children (N = 446). Well established associations between Conscientiousness and academic performance, however, could only be replicated with regard to zero-order correlations. Executive functions (inhibition, updating, and shifting), for their part, proved to be powerful predictors of academic performance. Results were to some extent dependent on the criterion with which academic performance was measured: Both personality factors had stronger effects on grades than on standardized achievement tests, whereas the opposite was true for executive functions. Finally, analyses on gender differences revealed that Extraversion and Openness/Culture played a more dominant role in girls than in boys, but only regarding grades.

Executive functions in 5- to 8-year olds: Developmental changes and relationship to academic achievement

Pronounced improvements in executive functions (EF) during preschool years have been documented in cross-sectional studies. However, longitudinal evidence on EF development during the transition to school and predictive associations between early EF and later school achievement are still scarce. This study examined developmental changes in EF across three time-points, the predictive value of EF for mathematical, reading and spelling skills and explored children's specific academic attainment as a function of early EF. Participants were 323 children following regular education; 160 children were enrolled in prekindergarten (younger cohort: 69 months) and 163 children in kindergarten (older cohort: 78.4 months) at the first assessment. Various tasks of EF were administered three times with an interval of one year each. Mathematical, reading and spelling skills were measured at the last assessment. Individual background characteristics such as vocabulary, non-verbal intelligence and socioeconomic status were included as control variables. In both cohorts, changes in EF were substantial; improvements in EF, however, were larger in preschoolers than school-aged children. EF assessed in preschool accounted for substantial variability in mathematical, reading and spelling achievement two years later, with low EF being especially associated with significant academic disadvantages in early school years. Given that EF continue to develop from preschool into primary school years and that starting with low EF is associated with lower school achievement, EF may be considered as a marker or risk for academic disabilities.

Prospective memory, executive functions and metacognitive control: An empirical approach to their structural interrelations in young elementary school children

Introduction Prospective memory (PM), the ability to remember to perform intended activities in the future (Kliegel & Jäger, 2007), is crucial to succeed in everyday life. PM seems to improve gradually over the childhood years (Zimmermann & Meier, 2006), but yet little is known about PM competences in young school children in general, and even less is known about factors influencing its development. Currently, a number of studies suggest that executive functions (EF) are potentially influencing processes (Ford, Driscoll, Shum & Macaulay, 2012; Mahy & Moses, 2011). Additionally, metacognitive processes (MC: monitoring and control) are assumed to be involved while optimizing one’s performance (Krebs & Roebers, 2010; 2012; Roebers, Schmid, & Roderer, 2009). Yet, the relations between PM, EF and MC remain relatively unspecified. We intend to empirically examine the structural relations between these constructs. Method A cross-sectional study including 119 2nd graders (mage = 95.03, sdage = 4.82) will be presented. Participants (n = 68 girls) completed three EF tasks (stroop, updating, shifting), a computerised event-based PM task and a MC spelling task. The latent variables PM, EF and MC that were represented by manifest variables deriving from the conducted tasks, were interrelated by structural equation modelling. Results Analyses revealed clear associations between the three cognitive constructs PM, EF and MC (rpm-EF = .45, rpm-MC = .23, ref-MC = .20). A three factor model, as opposed to one or two factor models, appeared to fit excellently to the data (chi2(17, 119) = 18.86, p = .34, remsea = .030, cfi = .990, tli = .978). Discussion The results indicate that already in young elementary school children, PM, EF and MC are empirically well distinguishable, but nevertheless substantially interrelated. PM and EF seem to share a substantial amount of variance while for MC, more unique processes may be assumed.