Essays on Stock Option Compensation and the Role of Incentives and Risk (summary section only)

Managerial pay-for-performance sensitivity has increased rapidly around the world. Early empirical research showed that pay-for-performance sensitivity resulting from stock ownership and stock options appeared to be quite low during the 1970s and early 1980s in the U.S. However, recent empirical research from the U.S. shows an enormous increase in pay-for-performance sensitivity. The global trend has also reached Finland, where stock options have become a major ingredient of executive compensation. The fact that stock options seem to be an appealing form of remuneration from a theoretical point of view combined with the observation that the use of this compensation form has increased significantly during the recent years, implies that research on the dynamics of stock option compensation is highly relevant for the academic community, as well as for practitioners and regulators. The research questions of the thesis are analyzed in four separate essays. The first essay examines whether stock option compensation practices of Finnish firms are consistent with predictions from principal-agent theory. The second essay explores one of the major puzzles in the compensation literature by studying determinants of stock option contract design. In theory, optimal contract design should vary according to firm characteristics. However, in the U.S., variation in contract design seems to be surprisingly low, a phenomenon generally attributed to tax and accounting considerations. In Finland, however, firms are not subject to stringent contracting restrictions, and the variation in contract design tends, in fact, to be quite substantial. The third essay studies the impact of price- and risk incentives arising from stock option compensation on firm investment. In addition, the essay explores one of the most debated questions in the literature, in particular, the relation between incentives and firm performance. Finally, several strands of literature in both economics and corporate finance hypothesize that economic uncertainty is related to corporate decision-making. Previous research has shown that risk tends to slow down firm investment. In the fourth essay, it is hypothesized that firm risk slows down growth from a more universal perspective. Consistent with this view, it is shown that risk not only tends to slow down firm investment, but also employment growth. Moreover, the essay explores whether the nature of firms’ compensation policies, in particular, whether firms make use of stock option compensation, affects the relation between risk and firm growth. In summary, the four essays contribute to the current understanding of stock options as a form of equity incentives, and how incentives and risk affect corporate decision-making. By this, the thesis promotes the knowledge related to the modern theory of the firm.

The Critical Role of N- and C-Terminal Contact in Protein Stability and Folding of a Family 10 Xylanase under Extreme Conditions

Background: Stabilization strategies adopted by proteins under extreme conditions are very complex and involve various kinds of interactions. Recent studies have shown that a large proportion of proteins have their N- and C-terminal elements in close contact and suggested they play a role in protein folding and stability. However, the biological significance of this contact remains elusive. Methodology: In the present study, we investigate the role of N- and C-terminal residue interaction using a family 10 xylanase (BSX) with a TIM-barrel structure that shows stability under high temperature,alkali pH, and protease and SDS treatment. Based on crystal structure,an aromatic cluster was identified that involves Phe4, Trp6 and Tyr343 holding the Nand C-terminus together; this is a unique and important feature of this protein that might be crucial for folding and stabilityunder poly-extreme conditions. Conclusion: A series of mutants was created to disrupt this aromatic cluster formation and study the loss of stability and function under given conditions. While the deletions of Phe4 resulted in loss of stability, removal of Trp6 and Tyr343 affected in vivo folding and activity. Alanine substitution with Phe4, Trp6 and Tyr343 drastically decreased stability under all parameters studied. Importantly,substitution of Phe4 with Trp increased stability in SDS treatment.Mass spectrometry results of limited proteolysis further demonstrated that the Arg344 residue is highly susceptible to trypsin digestion in sensitive mutants such as DF4, W6A and Y343A, suggesting again that disruption of the Phe4-Trp6-Tyr343 (F-W-Y) cluster destabilizes the N-and C-terminal interaction. Our results underscore the importance of N- and C-terminal contact through aromatic interactions in protein folding and stability under extreme conditions, and these results may be useful to improve the stability of other proteins under suboptimal conditions.

The Context and Diffusion of Knowledge in the Finnish Jewellery Industry - The role of the House of Fabergé

Researchers within the fields of economic geography and organizational management have extensively studied learning and the prerequisites and impediments for knowledge transfer. This paper combines two discourses within the two subjects: the-communities-of-practice and the learning region approaches, merging them through the so-called ecology of knowledge-approach, which is used to examine the knowledge transfer from the House of Fabergé to the Finnish jewellery industry. We examine the pre-revolution St Petersburg jewellery cluster and the post-revolution Helsinki, and the transfer of knowledge between these two locations through the components of communities of people, institutions and industry. The paper shows that the industrial dynamics of the Finnish modern-day goldsmith industry was inherently shaped both through the transfer and the non-transfer of knowledge. It also contends that the “knowledge-economy” is not anchored in and exclusive for the high technology sector of the late 20th century.

Studies on friction and transfer layer: role of surface texture

Friction influences the nature of transfer layer formed at the interface between tool and metal during sliding. In the present investigation, experiments were conducted using “Inclined Scratch Tester” to understand the effect of surface texture of hard surfaces on coefficient of friction and transfer layer formation. EN8 steel flats were ground to attain surfaces of different textures with different roughness. Then super purity aluminium pins were scratched against the prepared steel flats. Scanning electron micrographs of the contact surfaces of pins and flats were used to reveal the morphology of transfer layer. It was observed that the coefficient of friction and the formation of transfer layer depend primarily on the texture of hard surfaces, but independent of surface roughness of hard surfaces. It was observed that on surfaces that promote plane strain conditions near the surface, the transfer of material takes place due to the plowing action of the asperities. But, on a surface that promotes plane stress conditions the transfer layer was more due to the adhesion component of friction. It was observed that the adhesion component increases for surfaces that have random texture but was constant for the other surfaces

Role of the environment in the interaction of nonintercalators with Z-DNA

Interaction of the DNA binding nonintercalators Netropsin, Distamycin and the mPD derivative with Z-DNA has been studied. It has been found that environmental factors like the solvent and added cations significantly modulate the interaction of these ligands with Z-DNA. However no definite Z to B transition in presence of these ligands was found in any case, in contrast to previously reported results (Ch. Zimmer, C. Marck and W. Guschlbauer, FEBS Lett. 154, 156-160 (1983)).

Role of hydroxyl group on the mesomorphism of alkyl glycosides:synthesis and thermal behavior of alkyl 6-deoxy-beta-D-glucopyranosides

A homologous series of alkyl 6-deoxy-beta-D-glucopyranoside amphiphiles was prepared,in an effort to identify the role of hydroxyl group in the mesomorphic behavior of alkyl glycosides. Synthesis was performed by a chlorination of the sugar moiety in alkyl-beta-D-glucopyranosides with methylsulfonyl chloride in DMF, followed by a metal mediated dehalogenation to secure alkyl 6-deoxy-beta-D-glucopyranosides, wherein the alkyl chain length varied from C-9 to C-16. The mesomorphic behavior of these 6-deoxy alkyl glycosides was assessed using polarizing optical microscopy, differential scanning calorimetry and X-ray diffraction method. Whereas the lower homologues exhibited a monotropic SmA phase till sub-ambient temperatures, the higher homologues formed a plastic phase. A partial interdigitized bilaye structure of SmA phase is inferred from experimental d-spacing and computationally derived lengths of the molecules. The results were compared with those of normal alkyl glucopyranosides, retained with hydroxyl groups at C-2-C-6 carbons, and alkyl 2-deoxy-glucopyranosides, devoid of a hydroxyl group at C-2 and the comparison showed important differences in the mesomorphic behavior.(C)2010 Elsevier Ireland Ltd. All rights reserved.

Symmetrical Bisbenzimidazoles with Benzenediyl Spacer: The Role of the Shape of the Ligand on the Stabilization and Structural Alterations in Telomeric G-Quadruplex DNA and Telomerase Inhibition

The extremities of chromosomes end in a G-rich single-stranded overhang that has been implicated in the onset of the replicate senescence. The repeated sequence forming a G-overhang is able to adopt a four-stranded DNA structure called G-quadruplex, which is a poor substrate for the enzyme telomerase. Small molecule based ligands that selectively stabilize the telomeric G-quadruplex DNA, induce telomere shortening eventually leading to cell death. Herein, we have investigated the G-quadruplex DNA interaction with two isomeric bisbenzimidazole-based compounds that differ in terms of shape (V-shaped angular vs linear).While the linear isomer induced some stabilization of the intramolecular G-quadruplex structure generated in the presence of Na+ the other, having V-shaped central planar core, caused a dramatic structural alteration of the latter, above a threshold concentration. This transition was evident from the pronounced changes observed in the circular dichroism spectra and from the get mobility shift assa involving the G-quadruples DNA. Notably, this angular isomer could also induce the G-quadruplex formation in the absence of any added cation. The ligand-quadruples complexes were investigated by computational molecular modeling, providing further information on structure-activity relationships. Finally, TRAP (telomerase repeat amplification protocol) experiments demonstrated that the angular isomer is selective toward the inhibition of telomerase activity.

Role of aluminum-magnesium alloys in humid aging of composite solid propellants

The humid aging of composite propellants containing a terpolymer of polybutadiene, acrylic acid, and acrylonitrile (PBAN) as a binder has been studied as a function of aging temperature, relative humidity, and aging time. Three composite types - AP-PBAN, AP-Al-PBAN, and AP-(Al-Mg) alloy- PBAN - have been studied. The burning rates of all three propellant types were unaffected by aging. The calorimetric values of composites containing aluminum-magnesium alloy decreased on aging, and the lattice parameter of the alloy decreased to a value close to that of aluminum. Water absorption in all of the samples increased with increases in the temperature, relative humidity, and aging time. The compression strength of the nonmetalized and aluminized samples decreased on aging, whereas that of the composites containing the alloy increased. The latter effect has been traced to reaction of residual carboxyl groups on the polymer chains with magnesium, leading to cross-linking. The reaction between the -COOH groups and magnesium has been proved using infrared spectroscopy. (Author)

Role of juvenile hormone in the synthesis and sequestration of vitellogenins in the red cotton stainer, Dysdercus koenigii (Heteroptera : Pyrrhocoridae)

Investigations were carried out to determine the role of juvenile hormone (JH) and 20-hydroxy ecdysone in the synthesis and uptake of vitellogenins, which were earlier identified, purified and characterised, in Dysdercus koenigii. The concentration(s) of vitellogenin(s) in fat body, haemolymph and that of vitellin(s) in ovary were significantly lower after chemical allatectomy at eclosion. In addition, at 70 h after emergence, chemical allatectomy reduced ovarian vitellin concentration, but vitellogenin levels remained normal in the fat body and haemolymph. The haemolymph vitellogenins were not incorporated into oocytes in such insects. Administration of JH-III at 20 h after allatectomy restored vitellogenin levels in the fat body and haemolymph, but the ovary failed to incorporate the available vitellogenins from haemolymph in such insects. However, when JH-III was administered twice, one at 20 h and then at 70 h after allatectomy, vitellogenin concentrations in fat body and haemolymph and also vitellin concentrations in ovary approached control levels. It is suggested that JH has two separate roles, one in vitellogenin synthesis and the other in uptake. 20-hydroxy ecdysone had no apparent role in either vitellogenin synthesis or uptake in D. koenigii. (C) 2000 Elsevier Science Inc. All rights reserved.

Studies on follicular atresia: role of gonadotropins and gonadal steroids in regulating cathepsin-D activity of preovulatory follicles in the rat

Preovulatory follicular atresia was studied using pregnant mare serum gonadotropin (PMSG)-primed rats (15 IU/rat) which were deprived of hormonal support either by allowing the metabolic clearance of the PMSG or by injecting a specific PMSG antiserum (PMSG a/s). Atresia was monitored by an increase in lysosomal cathepsin-D activity and a decrease in the receptor activity of the granulosa cells (GC) isolated from the preovulatory follicles. It was shown that the increase in lysosomal activity and the decrease in receptor activity seen at 96 h after PMSG (or PMSG plus PMSG a/s) could be arrested both by follicle stimulating hormone (FSH) and luteinizing hormone (LH). Injection of cyanoketone or clomiphene citrate together with FSH/LH prevented this 'rescue' suggesting a role for estrogens in the regulation of atresia. Although the administration of estradiol-17 beta (20 micrograms/rat) together with PMSG a/s could show a 'rescue effect' in terms of reduction in cathepsin-D activity the gonadotropin receptor activities of these granulosa cells were not restored. The injection of dihydrotestosterone (DHT) to 48 h PMSG-primed rats induced atresia as noted by an increase in cathepsin-D activity. However, the exogenous administration of FSH along with DHT prevented this atretic effect suggesting that DHT is not having a direct effect on atresia. Determination of androgen: estrogen content of the granulosa cells and an analysis of the individual profile of androgen and estrogen revealed that the increase in cathepsin-D activity could be correlated only with the decrease in GC estrogen content. This along with the observation that GC showed a loss of estrogen synthesis well before the increase in cathepsin-D activity strongly points out that the lack of estrogen rather than an increase in androgen is the principle factor responsible for the atresia of preovulatory follicles in the rat.

Examination of the role of follicle stimulating hormone in estrogen biosynthesis Image Image and Image Image in the ovary of cyclic hamster

The effect of neutralizing endogenous follicle stimulating hormone (FSH) or luteinizing hormone (LH) with specific antisera on the Image Image and Image Image synthesis of estrogen in the ovary of cycling hamster was studied. Neutralization of FSH or LH on proestrus resulted in a reduction in the estradiol concentration of the ovary on diestrus-2 and next proestrus, suggesting an impairment in follicular development.Injection of FSH antiserum at 0900 h of diestrus-2 significantly reduced the ovarian estradiol concentration within 6–7 h. Further, these ovaries on incubation with testosterone(T) Image Image at 1600 h of the same day or the next day synthesized significantly lower amounts of estradiol, compared to corresponding control ovaries. Although testosterone itself, in the absence of endogenous FSH, could stimulate estrogen synthesis to some extent, FSH had to be supplemented with T to restore estrogen synthesis to the level seen in control ovaries incubated with T. Lack of FSH thus appeared to affect the aromatization step in the estrogen biosynthetic pathway in the ovary of hamster on diestrus-2. In contrast to this, FSH antiserum given on the morning of proestrus had no effect on the Image Image and Image Image synthesis of estrogen, when examined 6–7 h later. The results suggest that there could be a difference in the need for FSH at different times of the cycle.Neutralization of LH either on diestrus-2 or proestrus resulted in a drastic reduction in estradiol concentration of the ovary. This block was at the level of androgen synthesis, since supplementing testosterone alone Image Image could stimulate estrogen synthesis to a more or less similar extent as in the ovaries of control hamsters.

A numerical study of the role of the vertical structure of vorticity during tropical cyclone genesis

An eight-level axisymmetric model with simple parameterizations for clouds and the atmospheric boundary layer was developed to examine the evolution of vortices that are precursors to tropical cyclones. The effect of vertical distributions of vorticity, especially that arising from a merger of mid-level vortices, was studied by us to provide support for a new vortex-merger theory of tropical cyclone genesis. The basic model was validated with the analytical results available for the spin-down of axisymmetric vortices. With the inclusion of the cloud and boundary layer parameterizations, the evolution of deep vortices into hurricanes and the subsequent decay are simulated quite well. The effects of several parameters such as the initial vortex strength, radius of maximum winds, sea-surface temperature and latitude (Coriolis parameter) on the evolution were examined. A new finding is the manner in which mid-level vortices of the same strength decay and how, on simulated merger of these mid-level vortices, the resulting vortex amplifies to hurricane strength in a realistic time frame. The importance of sea-surface temperature on the evolution of full vortices was studied and explained. Also it was found that the strength of the surface vortex determines the time taken by the deep vortex to amplify to hurricane strength.

Real-Time PCR : A Molecular Approach to Investigate the Role of Intestinal Microbiota in the Pathophysiology of Irritable Bowel Syndrome

Irritable bowel syndrome (IBS) is a common multifactorial functional intestinal disorder, the pathogenesis of which is not completely understood. Increasing scientific evidence suggests that microbes are involved in the onset and maintenance of IBS symptoms. The microbiota of the human gastrointestinal (GI) tract constitutes a massive and complex ecosystem consisting mainly of obligate anaerobic microorganisms making the use of culture-based methods demanding and prone to misinterpretation. To overcome these drawbacks, an extensive panel of species- and group-specific assays for an accurate quantification of bacteria from fecal samples with real-time PCR was developed, optimized, and validated. As a result, the target bacteria were detectable at a minimum concentration range of approximately 10 000 bacterial genomes per gram of fecal sample, which corresponds to the sensitivity to detect 0.000001% subpopulations of the total fecal microbiota. The real-time PCR panel covering both commensal and pathogenic microorganisms was assessed to compare the intestinal microbiota of patients suffering from IBS with a healthy control group devoid of GI symptoms. Both the IBS and control groups showed considerable individual variation in gut microbiota composition. Sorting of the IBS patients according to the symptom subtypes (diarrhea, constipation, and alternating predominant type) revealed that lower amounts of Lactobacillus spp. were present in the samples of diarrhea predominant IBS patients, whereas constipation predominant IBS patients carried increased amounts of Veillonella spp. In the screening of intestinal pathogens, 17% of IBS samples tested positive for Staphylococcus aureus, whereas no positive cases were discovered among healthy controls. Furthermore, the methodology was applied to monitor the effects of a multispecies probiotic supplementation on GI microbiota of IBS sufferers. In the placebo-controlled double-blind probiotic intervention trial of IBS patients, each supplemented probiotic strain was detected in fecal samples. Intestinal microbiota remained stable during the trial, except for Bifidobacterium spp., which increased in the placebo group and decreased in the probiotic group. The combination of assays developed and applied in this thesis has an overall coverage of 300-400 known bacterial species, along with the number of yet unknown phylotypes. Hence, it provides good means for studying the intestinal microbiota, irrespective of the intestinal condition and health status. In particular, it allows screening and identification of microbes putatively associated with IBS. The alterations in the gut microbiota discovered here support the hypothesis that microbes are likely to contribute to the pathophysiology of IBS. The central question is whether the microbiota changes described represent the cause for, rather than the effect of, disturbed gut physiology. Therefore, more studies are needed to determine the role and importance of individual microbial species or groups in IBS. In addition, it is essential that the microbial alterations observed in this study will be confirmed using a larger set of IBS samples of different subtypes, preferably from various geographical locations.