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Value-Based CEO Equity Grants

Reynolds Holding

Equity has become a dominant component of CEO compensation in the past three decades due to its ability to align the interests of managers and shareholders. Each year, a firm can award its CEO either a certain number (share-based) or a given dollar value (value-based) of equity grants. We find that about 40.6

Equity 45
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Racial Diversity Exposure and Firm Responses Following the Murder of George Floyd

Harvard Corporate Governance

Diversity, equity and inclusion (DEI) is a highly debated topic in the corporate world these days. Although research has provided only a limited understanding of the impact of DEI on firm value, particularly with regards to race and ethnicity, both firms and regulators have taken actions to expand corporate DEI initiatives.

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Statement by Commissioner Peirce on Share Repurchase Disclosure Modernization

Harvard Corporate Governance

The release points out that share repurchases could be “conducted to increase management compensation or to affect various accounting metrics,” rather than to increase firm value. [1] 1] Some people would argue that issuers should use excess cash to increase employee wages or fund research and development. 3] (more…)

Dividends 263
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Deregulation and Board Policies: Evidence from Performance Measures Used in Bank CEO Turnover Decisions

Harvard Corporate Governance

In contrast, most variation in CEO wealth stems from changes in the value of stock and option holdings, so the incentives arising from the CEO’s compensation are partly delegated to the equity markets (Hall and Liebman 1998; Edmans, Gabaix, and Jenter 2017).

Banking 201
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CVC takes stake in owner of paint group Farrow & Ball

Financial Times M&A

Investment by private equity firm values Danish group Hempel at more than $3.6bn

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Bankruptcy’s Turn to Market Value

Reynolds Holding

A very brief primer on corporate restructuring and bankruptcy: Distressed firms that cannot keep up with their debt payments typically seek to reduce their debt obligations, often in bankruptcy and sometimes in out-of-court negotiations. The court values the firm to see how much the business can pay back to creditors.

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Does Mandatory Board Gender Balancing Reduce Firm Value?

Reynolds Holding

As a social-policy instrument, forced board-gender balancing is in principle unrelated to firms’ economic performance. Nonetheless, imposing such a policy may have unintended consequences (positive or negative) for firm value, which is important for all of a firm’s constituencies – not only shareholders – to understand properly.