Essays in banking and corporate finance

Abstract This paper presents a model of executive compensation in which the executive is risk-averse and has specific knowledge -knowledge about the optimal actions to take that is costly to transfer to the principal. The model generates predictions that are consistent with the available evidence and provides a rationale for a number of unresolved puzzles in executive compensation. Notably, we find that relative performance evaluation is optimal only if the quality of specific knowledge is low. We also show (1) why some common risk components are not filtered out of executives' pay, (2) why performance is more likely to be evaluated relative to aggregate market movements than relative to industry movements, and (3) why executives with higher perceived abilities are given stronger incentives. Finally, we demonstrate that the relation between risk and incentives may be positive or negative, depending on the quality of the executive's specific knowledge.

Motivating Employees of the Public Sector: Does Public Service Motivation Matter?

This article analyzes if, and to what extent, the public service motivation (PSM) construct has an added value to explain work motivation in the public sector. In order to address the specificity of PSM when studying work motivation, the theoretical model underlying this empirical study compares PSM with two other explanatory factors: material incentives, such as performance-related pay, and team relations and support, such as recognition by superiors. This theoretical model is then tested with data collected in a national survey of 3,754 civil servants at the Swiss municipal level. Results of a structural equations model clearly show the relevance of PSM. They also provide evidence for the importance of socio-relational motivating factors, whereas material incentives play an anecdotal role.

Personality traits and virtual reality performance.

BACKGROUND: Surgeons' personalities have been described as different from those of the general population, but this was based on small descriptive studies limited by the choice of evaluation instrument. Furthermore, although the importance of the human factor in team performance has been recognized, the effect of personality traits on technical performance is unknown. This study aimed to compare surgical residents' personality traits with those of the general population and to evaluate whether an association exists between their personality traits and technical performance using a virtual reality (VR) laparoscopy simulator. METHODS: In this study, 95 participants (54 residents with basic, 29 with intermediate laparoscopic experience, and 12 students) underwent personality assessment using the NEO-Five Factor Inventory and performed five VR tasks of the Lap Mentor? basic tasks module. The residents' personality traits were compared with those of the general population, and the association between VR performance and personality traits was investigated. RESULTS: Surgical residents showed personality traits different from those of the general population, demonstrating lower neuroticism, higher extraversion and conscientiousness, and male residents showed greater openness. In the multivariable analysis, adjusted for gender and surgical experience, none of the personality traits was found to be an independent predictor of technical performance. CONCLUSIONS: Surgical residents present distinct personality traits that differ from those of the general population. These traits were not found to be associated with technical performance in a virtual environment. The traits may, however, play an important role in team performance, which in turn is highly relevant for optimal surgical performance.

Division of Persons with Disabilities Agency Performance Plan

Agency Performance Plan

Department of Commerce - Iowa Utilities Board, Performance Report, Performance Results Achieved for Fiscal Year 2004, December 2004

The FY04 Performance Report for the Iowa Utilities Board (IUB) highlights the services the IUB provided to Iowans, along with results achieved to ensure utility service reliability and to improve and expand utility service infrastructure in Iowa. This information is provided in accordance with the State of Iowa Accountable Government Act, Iowa Code chapter 8E. The two basic business functions of the IUB are utility regulation and compliance, and resource management. This report covers performance information for both of these areas.

Porting and performance analysis of EC-Earth System on the BSC-MareNostrum Supercomputer

Earth System Models (ESM) have been successfuly developed over past few years, and are currently beeing used for simulating present day-climate, seasonal to interanual predictions of climate change. The supercomputer performance plays an important role in climate modeling since one of the challenging issues for climate modellers is to efficiently and accurately couple earth System components on present day computers architectures. At the Barcelona Supercomputing Center (BSC), we work with the EC- Earth System Model. The EC- Earth is an ESM, which currently consists of an atmosphere (IFS) and an ocean (NEMO) model that communicate with each other through the OASIS coupler. Additional modules (e.g. for chemistry and vegetation ) are under development. The EC-Earth ESM has been ported successfully over diferent high performance computin platforms (e.g, IBM P6 AIX, CRAY XT-5, Intelbased Linux Clusters, SGI Altix) at diferent sites in Europ (e.g., KNMI, ICHEC, ECMWF). The objective of the first phase of the project was to identify and document the issues related with the portability and performance of EC-Earth on the MareNostrum supercomputer, a System based on IBM PowerPC 970MP processors and run under a Linux Suse Distribution. EC-Earth was successfully ported to MareNostrum, and a compilation incompatibilty was solved by a two step compilation approach using XLF version 10.1 and 12.1 compilers. In addition, the EC-Earth performance was analyzed with respect to escalability and trace analysis with the Paravear software. This analysis showed that EC-Earth with a larger number of IFS CPUs (<128) is not feasible at the moment since some issues exists with the IFS-NEMO balance and MPI Communications.

The relationship between monocarboxylate transporters 1 and 4 expression in skeletal muscle and endurance performance in athletes

The purpose of this study was to examine the relationship between skeletal muscle monocarboxylate transporters 1 and 4 (MCT1 and MCT4) expression, skeletal muscle oxidative capacity and endurance performance in trained cyclists. Ten well-trained cyclists (mean +/- SD; age 24.4 +/- 2.8 years, body mass 73.2 +/- 8.3 kg, VO(2max) 58 +/- 7 ml kg(-1) min(-1)) completed three endurance performance tasks [incremental exercise test to exhaustion, 2 and 10 min time trial (TT)]. In addition, a muscle biopsy sample from the vastus lateralis muscle was analysed for MCT1 and MCT4 expression levels together with the activity of citrate synthase (CS) and 3-hydroxyacyl-CoA dehydrogenase (HAD). There was a tendency for VO(2max) and peak power output obtained in the incremental exercise test to be correlated with MCT1 (r = -0.71 to -0.74; P < 0.06), but not MCT4. The average power output (P (average)) in the 2 min TT was significantly correlated with MCT4 (r = -0.74; P < 0.05) and HAD (r = -0.92; P < 0.01). The P (average) in the 10 min TT was only correlated with CS activity (r = 0.68; P < 0.05). These results indicate the relationship between MCT1 and MCT4 as well as cycle TT performance may be influenced by the length and intensity of the task.

Quantification of typical antipsychotics in human plasma by ultra-high performance liquid chromatography tandem mass spectrometry for therapeutic drug monitoring.

A selective and sensitive method was developed for the simultaneous quantification of seven typical antipsychotic drugs (cis-chlorprothixene, flupentixol, haloperidol, levomepromazine, pipamperone, promazine and zuclopenthixol) in human plasma. Ultra-high performance liquid chromatography (UHPLC) was used for complete separation of the compounds in less than 4.5min on an Acquity UPLC BEH C18 column (2.1mm×50mm; 1.7μm), with a gradient elution of ammonium formate buffer pH 4.0 and acetonitrile at a flow rate of 400μl/min. Detection was performed on a tandem quadrupole mass spectrometer (MS/MS) equipped with an electrospray ionization interface. A simple protein precipitation procedure with acetonitrile was used for sample preparation. Thanks to the use of stable isotope-labeled internal standards for all analytes, internal standard-normalized matrix effects were in the range of 92-108%. The method was fully validated to cover large concentration ranges of 0.2-90ng/ml for haloperidol, 0.5-90ng/ml for flupentixol, 1-450ng/ml for levomepromazine, promazine and zuclopenthixol and 2-900ng/ml for cis-chlorprothixene and pipamperone. Trueness (89.1-114.8%), repeatability (1.8-9.9%), intermediate precision (1.9-16.3%) and accuracy profiles (<30%) were in accordance with the latest international recommendations. The method was successfully used in our laboratory for routine quantification of more than 500 patient plasma samples for therapeutic drug monitoring. To the best of our knowledge, this is the first UHPLC-MS/MS method for the quantification of the studied drugs with a sample preparation based on protein precipitation.

Report of Recommendations to the Iowa Department of Transportation on a Review of Selected General and Application Controls Over the Contractor Pay System, April 5, 2004 through May 21, 2004

State Agency Audit Report

How does ownership structure invfluence bank risk? Analyzing the role of managerial incentives

This paper analyzes how ownership concentration and managerial incentives influences bank risk for a large sample of US banks over the period 1997-2007. Using 2SLS simultaneous equations models, we show that ownership concentration has a positive total effect on bank risk. This is the result of a positive direct effect, which reflects monitoring and opportunistic behavior, and a negative indirect effect, which works through the design of managerial incentive contracts and reflects shareholder preferences toward risk. Large shareholders reduce bank risk by reducing the sensitivity of CEO wealth to stock volatility (Vega) and by increasing the CEO pay-performance sensitivity (Delta). In addition, we show that the direct and indirect effect of ownership concentration on bank risk depends on the type of the largest shareholder (a family, a bank, a corporation or an institutional investor), as well as, on the total shareholding held by each type as a group. Our results suggest that the positive relation between ownership concentration and risk is not the result of preferences towards more risk. Rather, they point at opportunistic behavior of large shareholders.

Multimarket contact externalities: the effect of rival's multimarket contacts on focal firm performance

Given that firms develop their activities in a network of multiple players, interfirm rivalry is not only a matter of direct competitors, but also of indirect competition. In spite of this, the literature on competitive dynamics tends to focus on analyzing rivalry as an exclusive function of the competitive relationship between a focal firm and its direct rivals. In this article, we extend competitive dynamics literature by considering how focal firms are affected by the relationships of their rivals with third-party firms. Specifically, we study the effect that the multimarket contacts of rivals produces on the performance of the focal firm. Additionally, we incorporate the idea that there are different strategic options for operating in an industry that affect the intensity of multimarket contact externalities. Our results show that multimarket contact among firms causes externalities that indirectly affect firms that are not directly involved in this competitive relationship. We find that multimarket contact externalities differ between and within strategic groups.