Essays on Stock Options, Incentives, and Managerial Action

Executive compensation and managerial behavior have received an increasing amount of attention in the financial economics literature since the mid 1970s. The purpose of this thesis is to extend our understanding of managerial compensation, especially how stock option compensation is linked to the actions undertaken by the management. Furthermore, managerial compensation is continuously and heatedly debated in the media and an emerging consensus from this discussion seems to be that there still exists gaps in our knowledge of optimal contracting. In Finland, the first executive stock options were introduced in the 1980s and throughout the last 15 years it has become increasingly popular for Finnish listed firms to use this type of managerial compensation. The empirical work in the thesis is conducted using data from Finland, in contrast to most previous studies that predominantly use U.S. data. Using Finnish data provides insight of how market conditions affect compensation and managerial action and provides an opportunity to explore what parts of the U.S. evidence can be generalized to other markets. The thesis consists of four essays. The first essay investigates the exercise policy of the executive stock option holders in Finland. In summary, Essay 1 contributes to our understanding of the exercise policies by examining both the determinants of the exercise decision and the markets reaction to the actual exercises. The second essay analyzes the factors driving stock option grants using data for Finnish publicly listed firms. Several agency theory based variables are found to have have explanatory power on the likelihood of a stock option grant. Essay 2 also contributes to our understanding of behavioral factors, such as prior stock return, as determinants of stock option compensation. The third essay investigates the tax and stock option motives for share repurchases and dividend distributions. We document strong support for the tax motive for share repurchases. Furthermore, we also analyze the dividend distribution decision in companies with stock options and find a significant difference between companies with and without dividend protected options. We thus document that the cutting of dividends found in previous U.S. studies can be avoided by dividend protection. In the fourth essay we approach the puzzle of negative skewness in stock returns from an altogether different angle than in previous studies. We suggest that negative skewness in stock returns is generated by management disclosure practices and find proof for this. More specifically, we find that negative skewness in daily returns is induced by returns for days when non-scheduled firm specific news is disclosed.

Executive Stock Options: Exercise Policy and Market Reaction

In this paper I investigate the exercise policy, and the market reaction to that, of the executive stock option holders in Finland. The empirical tests are conducted with aggregated firm level data from 34 firms and 41 stock option programs. I find some evidence of an inverse relation between the exercise intensity of the options holders and the future abnormal return of the company share price. This finding is supported by the view that information about future company prospect seems to be the only theoretical attribute that could delay the exercise of the options. Moreover, a high concentration of exercises in the beginning of the exercise window is predicted and the market is expected to react to deviations from this. The empirical findings however show that the market does not react homogenously to the information revealed by the late exercises.

Ilmastonmuutoksen ääri-ilmiöihin liittyvän riskienhallinnan kustannus–hyötyanalyysi osana julkista päätöksentekoa. IRTORISKI-hankkeen loppuraportti.

IRTORISKI-hankkeessa tutkittiin, miten kustannus–hyötyanalyysin käyttöä ilmastonmuutoksen sopeutumissuunnittelussa voitaisiin helpottaa niin, että sitä pystyttäisiin hyödyntämään kustannustehokkaasti sekä ilmastonmuutokseen liittyvien vaarojen priorisoinnissa että ennaltaehkäisevien toimenpiteiden vertailussa. Tutkimuksessa käytettiin esimerkkitapauksina jokitulvaa ja rankkasateiden aiheuttamaa tulvaa kaupunkiolosuhteissa. Tapahtumapuuanalyysia laajennettiin siten, että siitä käyvät ilmi sekä suorat vahingot että lopulliset makrotaloudelliset vaikutukset. Arviot suorista taloudellisista vahingoista perustuivat aikaisempiin tutkimuksiin, kun taas makrotaloudellisia vaikutuksia simuloitiin yleisen tasapainon mallin avulla. Tapaustutkimusten valinnasta, tapahtumapuun käytöstä, sen laajennusosasta sekä lasketuista makrotaloudellisista vaikutuksista keskusteltiin sidosryhmien edustajien kanssa kolmessa asiantuntijaistunnossa.

Sanailua, kynäilyä, intoilua ja epäilyä : Oppilaiden kirjoitustaito ja sen arvioiminen alkuopetuksessa

Objectives. In primary education the pupils form a basis for their writing skills. By assessing pupils writing skills the teacher gathers information about the development of their skills and notices possible learning disabilities. The assessment of writing skills requires both knowledge of different evaluation methods and the phonological system in Finnish language. The purpose of this study is to analyze the pupils writing skills and different assessment methods that help the teacher in writing evaluation. The pupils writing skills are viewed from spelling, composing and writing motivation s point of view. Methods. The research material consists of dictation exercises, written stories and writing motivation self-assessments of 19 pupils. Dictation exercises measured the spelling skills of pupils and they were written in the spring of the first grade and the autumn of the second grade. Dictation exercises were analyzed with two different methods: mistake analysis and word-structure analysis. Information of pupils spelling skills development was gathered by comparing their performance in autumn s dictation exercise to spring s dictation. Composing skills were measured with stories that the pupils wrote. Both the stories and the writing motivation s self-assessment were made in the autumn of the second grade. Composing skills were analyzed according to assessment criteria formed for this study. Results. The spelling skill of most of the pupils had developed from the first grade s spring to the second grade s autumn. The spelling skills of half of the pupils (N=9) had improved significantly. The composing skills of the pupils varied largely. Strongest part of the pupils composing skill was following instructions and the weakest part was the use of versatile vocabulary and clause structures. The girls outdid the boys in all segments of their composing skills. For most pupils their spelling skill reflected their composing skill: good spellers were also good story writers. The relation between writing motivation and general writing skill was not this simple: some pupils (N=5) writing motivation was much higher than what would have been expected based on their writing skills.

DEPTH: a web server to compute depth and predict small-molecule binding cavities in proteins

Depth measures the extent of atom/residue burial within a protein. It correlates with properties such as protein stability, hydrogen exchange rate, protein-protein interaction hot spots, post-translational modification sites and sequence variability. Our server, DEPTH, accurately computes depth and solvent-accessible surface area (SASA) values. We show that depth can be used to predict small molecule ligand binding cavities in proteins. Often, some of the residues lining a ligand binding cavity are both deep and solvent exposed. Using the depth-SASA pair values for a residue, its likelihood to form part of a small molecule binding cavity is estimated. The parameters of the method were calibrated over a training set of 900 high-resolution X-ray crystal structures of single-domain proteins bound to small molecules (molecular weight < 1.5 KDa). The prediction accuracy of DEPTH is comparable to that of other geometry-based prediction methods including LIGSITE, SURFNET and Pocket-Finder (all with Matthew's correlation coefficient of similar to 0.4) over a testing set of 225 single and multi-chain protein structures. Users have the option of tuning several parameters to detect cavities of different sizes, for example, geometrically flat binding sites. The input to the server is a protein 3D structure in PDB format. The users have the option of tuning the values of four parameters associated with the computation of residue depth and the prediction of binding cavities. The computed depths, SASA and binding cavity predictions are displayed in 2D plots and mapped onto 3D representations of the protein structure using Jmol. Links are provided to download the outputs. Our server is useful for all structural analysis based on residue depth and SASA, such as guiding site-directed mutagenesis experiments and small molecule docking exercises, in the context of protein functional annotation and drug discovery.

Wrinkled and slack membranes: nonlinear 3D elasticity solutions via smooth DMS-FEM and experiment

The smooth DMS-FEM, recently proposed by the authors, is extended and applied to the geometrically nonlinear and ill-posed problem of a deformed and wrinkled/slack membrane. A key feature of this work is that three-dimensional nonlinear elasticity equations corresponding to linear momentum balance, without any dimensional reduction and the associated approximations, directly serve as the membrane governing equations. Domain discretization is performed with triangular prism elements and the higher order (C1 or more) interelement continuity of the shape functions ensures that the errors arising from possible jumps in the first derivatives of the conventional C0 shape functions do not propagate because the ill-conditioned tangent stiffness matrices are iteratively inverted. The present scheme employs no regularization and exhibits little sensitivity to h-refinement. Although the numerically computed deformed membrane profiles do show some sensitivity to initial imperfections (nonplanarity) in the membrane profile needed to initiate transverse deformations, the overall patterns of the wrinkles and the deformed shapes appear to be less so. Finally, the deformed profiles, computed through the DMS FEM-based weak formulation, are compared with those obtained through an experiment on an ultrathin Kapton membrane, wherein wrinkles form because of the applied boundary displacement conditions. Comparisons with a reported experiment on a rectangular membrane are also provided. These exercises lend credence to the feasibility of the DMS FEM-based numerical route to computing post-wrinkled membrane shapes. Copyright (c) 2012 John Wiley & Sons, Ltd.

A Finite Element Method Based Approach for Evaluating the Sensitivity of Faraday-Type Electromagnetic Flow Meter for Liquid Sodium Flow

Faraday-type electromagnetic flow meters are employed for measuring the flow rate of liquid sodium in fast breeder reactors. The calibration of such flow meters, owing to the required elaborative arrangements is rather difficult. On the other hand, theoretical approach requires solution of two coupled electromagnetic partial differential equation with profile of the flow and applied magnetic field as the inputs. This is also quite involved due to the 3D nature of the problem. Alternatively, Galerkin finite element method based numerical solution is suggested in the literature as an attractive option for the required calibration. Based on the same, a computer code in Matlab platform has been developed in this work with both 20 and 27 node brick elements. The boundary conditions are correctly defined and several intermediate validation exercises are carried out. Finally it is shown that the sensitivities predicted by the code for flow meters of four different dimensions agrees well with the results given by analytical expression, thereby providing strong validation. Sensitivity for higher flow rates, for which analytical approach does not exist, is shown to decrease with increase in flow velocity.

Luminescent Molecular Sensors for Assessment of Temperature Field in Machining

A new technique based on luminescent molecular sensors is utilized in these series of experiments for measurement of temperatures in material removal processes. 2-Dimensional machining of metals at low speeds and surface grinding configurations are used as the model experimental systems to understand the efficacy of this experimental technique. The experiments were conducted with a series of luminescent sensors and binder combinations for the temperature measurement. The luminescence of the sensor was measured through a charge-coupled device imaging camera, and intensive calibration exercises were performed on these sensors. Excellent agreement in the temperature fields measured through this new experimental approach and traditional infrared thermography is seen here. This technique offers the unique capability of allowing measurement of temperatures in the presence of a lubricant, akin to manufacturing conditions in situ. Extension of the technique to measure the temperature field at the tool-chip contact is described.

Crystal landscape in the orcinol:4,4 `-bipyridine system: synthon modularity, polymorphism and transferability of multipole charge density parameters

Polymorphism in the orcinol: 4,4'-bipyridine cocrystal system is analyzed in terms of a robust convergent modular phenol...pyridine supramolecular synthon. Employing the Synthon Based Fragments Approach (SBFA) to transfer the multipole charge density parameters, it is demonstrated that the crystal landscape can be quantified in terms of intermolecular interaction energies in the five crystal forms so far isolated in this complex system. There are five crystal forms. The first has an open, divergent O-H...N based structure with alternating orcinol and bipyridine molecules. The other four polymorphs have different three-dimensional packing but all of them are similar at an interaction level, and are based on a modular O-H...N mediated supramolecular synthon that consists of two orcinol and two bipyridine molecules in a closed, convergent structure. The SBFA method, which depends on the modularity of synthons, provides good agreement between experiment and theory because it takes into account the supramolecular contribution to charge density. The existence of five crystal forms in this system shows that polymorphism in cocrystals need not be considered to be an unusual phenomenon. Studies of the crystal landscape could lead to an understanding of the kinetic pathways that control the crystallization processes, in other words the valleys in the landscape. These pathways are traditionally not considered in exercises pertaining to computational crystal structure prediction, which rather monitors the thermodynamics of the various stable forms in the system, in other words the peaks in the landscape.

Distribution, relative abundance, and conservation status of Asian elephants in Karnataka, southern India

Karnataka state in southern India supports a globally significant and the country's largest population of the Asian elephant Elephas maximus. A reliable map of Asian elephant distribution and measures of spatial variation in their abundance, both vital needs for conservation and management action, are unavailable not only in Karnataka, but across its global range. Here, we use various data gathered between 2000 and 2015 to map the distribution of elephants in Karnataka at the scale of the smallest forest management unit, the `beat', while also presenting data on elephant dung density for a subset of `elephant beats.' Elephants occurred in 972 out of 2855 forest beats of Karnataka. Sixty percent of these 972 beats and 55% of the forest habitat lay outside notified protected areas (PM), and included lands designated for agricultural production and human dwelling. While median elephant dung density inside protected areas was nearly thrice as much as outside, elephants routinely occurred in or used habitats outside PM where human density, land fraction under cultivation, and the interface between human-dominated areas and forests were greater. Based on our data, it is clear that India's framework for elephant conservation which legally protects the species wherever it occurs, but protects only some of its habitats while being appropriate in furthering their conservation within PM, seriously falters in situations where elephants reside in and/or seasonally use areas outside PAs. Attempts to further elephant conservation in production and dwelling areas have extracted high costs in human, elephant, material and monetary terms in Karnataka. In such settings, conservation planning exercises are necessary to determine where the needs of elephants or humans must take priority over the other, and to achieve that in a manner that is based not only on reliable scientific data but also on a process of public reasoning. (C) 2015 Elsevier Ltd. All rights reserved.

An approach to scenario analysis of the sustainability of an industrial sector applied to clothing and textiles in the UK

Companies aiming to be 'sustainability leaders' in their sector and governments wanting to support their ambitions need a means to assess the changes required to make a significant difference in the impact of their whole sector. Previous work on scenario analysis/scenario planning demonstrates extensive developments and applications, but as yet few attempts to integrate the 'triple bottom line' concerns of sustainability into scenario planning exercises. This paper, therefore, presents a methodology for scenario analysis of large change to an entire sector. The approach includes calculation of a 'triple bottom line graphic equaliser' to allow exploration and evaluation of the trade-offs between economic, environmental and social impacts. The methodology is applied to the UK's clothing and textiles sector, and results from the study of the sector are summarised. In reflecting on the specific study, some suggestions are made about future application of a similar methodology, including a template of candidate solutions that may lead to significant reduction in impacts. © 2007 Elsevier Ltd. All rights reserved.

Rendimiento y calidad de las interacciones sociocognitivas en díadas que trabajan colaborativamente en forma presencial y por chat

Resumen: En este trabajo se examina el rendimiento de estudiantes universitarios en razonamiento formal con y sin interacción social. La muestra N = 83 estuvo conformada por alumnos provenientes de dos universidades (UNMDP y UAA) quienes fueron asignados a dos condiciones: experimental con interacción (n = 40) y grupo control sin interacción (n = 43). El reactivo empleado consistió en una serie de pruebas del Test de Matrices Progresivas escala general y avanzada. Todos los participantes debieron resolver dichas tareas durante varias semanas: primero en forma individual (pretest), luego en forma colectiva presencial y por chat (díadas, condición experimental) y en forma individual (grupo control), y finalmente en forma individual (postest). Se registraron las interacciones que llevaron a cabo los participantes mediante videofilmación y logs del Chat. El rendimiento fue evaluado según la condición asignada: individual o grupal y en los últimos mediante una evaluación interjueces se estableció la calidad de las interacciones. Los resultados corroboran la superioridad de las díadas por sobre la performance individual; la reiteración en la fase de postest de aquellos ítems incorrectamente resueltos en el pretest más el agregado de nuevos ejercicios pusieron de relieve dos zonas de avance o de internalización de los progresos. En cuanto a la calidad de las interacciones, las mismas son coincidentes. Estos resultados abren nuevos interrogantes acerca del conflicto sociocognitivo y su papel para el avance grupal – individual.

Futures perspectives for manufacturing

This paper introduces a new approach to the capture, structuring and analysis of results from five national manufacturing Foresight exercises, and illustrates how such tools can help to integrate futures studies and strategy formulation.

Whales and Sonar: Environmental Exemptions for the Navy’s Mid-Frequency Active Sonar Training

Mid-frequency active (MFA) sonar emits pulses of sound from an underwater transmitter to help determine the size, distance, and speed of objects. The sound waves bounce off objects and reflect back to underwater acoustic receivers as an echo. MFA sonar has been used since World War II, and the Navy indicates it is the only reliable way to track submarines, especially more recently designed submarines that operate more quietly, making them more difficult to detect. Scientists have asserted that sonar may harm certain marine mammals under certain conditions, especially beaked whales. Depending on the exposure, they believe that sonar may damage the ears of the mammals, causing hemorrhaging and/or disorientation. The Navy agrees that the sonar may harm some marine mammals, but says it has taken protective measures so that animals are not harmed. MFA training must comply with a variety of environmental laws, unless an exemption is granted by the appropriate authority. Marine mammals are protected under the Marine Mammal Protection Act (MMPA) and some under the Endangered Species Act (ESA). The training program must also comply with the National Environmental Policy Act (NEPA), and in some cases the Coastal Zone Management Act (CZMA). Each of these laws provides some exemption for certain federal actions. The Navy has invoked all of the exemptions to continue its sonar training exercises. Litigation challenging the MFA training off the coast of Southern California ended with a November 2008 U.S. Supreme Court decision. The Supreme Court said that the lower court had improperly favored the possibility of injuring marine animals over the importance of military readiness. The Supreme Court’s ruling allowed the training to continue without the limitations imposed on it by other courts. (pdf contains 20pp.)

Unlike Physical Exercise, Modified Environment Increases the Lifespan of SOD1(G93A) Mice However Both Conditions Induce Cellular Changes

8 p.