Stock options as incentive contracts and dividend policy

Executive Stock Option Programs (SOPs) have become the dominant compensation instrument for top-management in recent years. The incentive effects of an SOP both with respect to corporate investment and financing decisions critically depend on the design of the SOP. A specific problem in designing SOPs concerns dividend protection. Usually, SOPs are not dividend protected, i.e. any dividend payout decreases the value of a manager’s options. Empirical evidence shows that this results in a significant decrease in the level of corporate dividends and, at the same time, into an increase in share repurchases. Yet, few suggestions have been made on how to account for dividends in SOPs. This paper applies arguments from principal-agent-theory and from the theory of finance to analyze different forms of dividend protection, and to address the relevance of dividend protection in SOPs. Finally, the paper relates the theoretical analysis to empirical work on the link between share repurchases and SOPs

The Effect of Target Transparency on Managers’ Target Setting Decisions

This study investigates, via two experiments, the effects of target transparency, which reflects employees' knowledge about each other's targets in an organization, on managers' target setting decisions. We also investigate whether this effect depends on the need for help among employees. We predict and find that target transparency and need for help interact to influence managers' target setting decisions. Target transparency increases target levels when the need for help is low, but not when it is high. Further, target transparency leads managers to differentiate less between individual employee targets. This reduction is greater when the need for help is high than when it is low. Additional analyses support our theory by revealing that managers strategically set targets in a way that is consistent with an intention to motivate both effort at the individual level and help among employees when such are needed. Our results help explain anecdotal evidence of why companies that value help among employees often make targets transparent throughout the entire organization

Kommunikation im Groves-Mechanismus – Ergebnisse eines Laborexperiments

Theoretische Untersuchungen haben gezeigt, dass der Groves-Mechanismus als Anreizsystenn zur wahrheitsgemäßen Berichterstattung äußerst wünschenswerte Eigenschaften aufweist. So ergibt sich die wahrheitsgemäße Berichterstattung für alle Spieler als Gleichgewicht in dominanten Strategien. Offen ist jedoch, ob sich dieses Gleichgewicht auch unter realen Bedingungen zeigt und ob der Anreizmechanismus — wie von der Theorie vorhergesagt — manipulationsresistent ist. Diesen Fragen wird in einer experimentellen Studie nachgegangen. Dabei wird den Teilnehmern in einem von zwei Treatments die Möglichkeit zur anonymen Kommunikation gegeben. Die Ergebnisse zeigen, dass der Groves-Mechanismus in keinem der beiden Treatments zu wahrheitsgemäßer Berichterstattung führt. Während dies im Treatment ohne Kommunikation jedoch auf soziale Präferenzen bzw. Schwierigkeiten beim Verständnis des Anreizmechanismus zurückgeführt werden kann, zeigen sich im Kommunikationstreatment stabile Manipulationsstrategien der Teilnehmer bis in die letzte Runde

Leistungsanreize durch Aktien oder Optionen? Eine Diskussion des State of the Art

Aktienoptionspläne für Vorstände sind in der jüngsten Vergangenheit stark in die öffentliche Kritik geraten. Parallel dazu wird eine intensive wissenschaftliche Diskussion über ihre Effizienz als Anreizinstrument geführt. Dieser Beitrag gibt einen Überblick über die (überwiegend numerischen) Ergebnisse jüngerer Beiträge zu den Leistungsanreizen aktienkursorientierter Vergütungsinstrumente. Die Ergebnisse der Beiträge werden vor dem Hintergrund des Grundmodells der Principal-Agent-Theorie diskutiert und interpretiert

Nanostructured Cu2_2O Synthesized via Bipolar Electrochemistry

Cuprous oxide (Cu$_2$O) was synthesized for the first time via an open bipolar electrochemistry (BPE) approach and characterized in parallel with the commercially available material. As compared to the reference, Cu$_2$O formed through a BPE reaction demonstrated a decrease in particle size; an increase in photocurrent; more efficient light scavenging; and structure-correlated changes in the flat band potential and charge carrier concentration. More importantly, as-synthesized oxides were all phase-pure, defect-free, and had an average crystallite size of 20 nm. Ultimately, this study demonstrates the impact of reaction conditions (e.g., applied potential, reaction time) on structure, morphology, surface chemistry, and photo-electrochemical activity of semiconducting oxides, and at the same time, the ability to maintain a green synthetic protocol and potentially create a scalable product. In the proposed BPE synthesis, we introduced a common food supplement (potassium gluconate) as a reducing and complexing agent, and as an electrolyte, allowing us to replace the more harmful reactants that are conventionally used in Cu$_2$O production. In addition, in the BPE process very corrosive reactants, such as hydroxides and metal precursors (required for synthesis of oxides), are generated in situ in stoichiometric quantity, providing an alternative methodology to generate various nanostructured materials in high yields under mild conditions

Conceptual Aspects of Large Meta-Analyses with Publicly Available Microarray Data: A Case Study in Oncology

Large public repositories of microarray experiments offer an abundance of biological data. It is of interest to use and to combine the available material to create new biological information and to develop a broader view on biological phenomena

Prion Infectivity and PrPBSE in the Peripheral and Central Nervous System of Cattle 8 Months Post Oral BSE Challenge

After oral exposure of cattle with classical bovine spongiform encephalopathy (C-BSE), the infectious agent ascends from the gut to the central nervous system (CNS) primarily via the autonomic nervous system. However, the timeline of this progression has thus far remained widely undetermined. Previous studies were focused on later time points after oral exposure of animals that were already 4 to 6 months old when challenged. In contrast, in this present study, we have orally inoculated 4 to 6 weeks old unweaned calves with high doses of BSE to identify any possible BSE infectivity and/or PrPBSE in peripheral nervous tissues during the first eight months postinoculation (mpi). For the detection of BSE infectivity, we used a bovine PrP transgenic mouse bioassay, while PrPBSE depositions were analyzed by immunohistochemistry (IHC) and by protein misfolding cyclic amplification (PMCA). We were able to show that as early as 8 mpi the thoracic spinal cord as well as the parasympathetic nodal ganglion of these animals contained PrPBSE and BSE infectivity. This shows that the centripetal prion spread starts early after challenge at least in this age group, which represents an essential piece of information for the risk assessments for food, feed, and pharmaceutical products produced from young calves

Optics with an Atom Laser Beam

We report on the atom optical manipulation of an atom laser beam. Reflection, focusing and its storage in a resonator are demonstrated. Precise and versatile mechanical control over an atom laser beam propagating in an inhomogeneous magnetic field is achieved by optically inducing spin-flips between atomic ground states with different magnetic moment. The magnetic force acting on the atoms can thereby be effectively switched on and off. The surface of the atom optical element is determined by the resonance condition for the spin-flip in the inhomogeneous magnetic field. A mirror reflectivity of more than 98% is measured

The evolution of social philopatry in female primates

The transition from solitary life to sociality is considered one of the major transitions in evolution. In primates, this transition is currently not well understood. Traditional verbal models appear insufficient to unravel the complex interplay of environmental and demographic factors involved in the evolution of primate sociality, and recent phylogenetic reconstructions have produced conflicting results. We therefore analyze a theoretical model for the evolution of female social philopatry that sheds new light on the question why most primates live in groups. In individual-based simulations, we study the evolution of dispersal strategies of both resident females and their offspring. The model reveals that social philopatry can evolve through kin selection, even if retention of offspring is costly in terms of within-group resource competition and provides no direct benefits. Our model supports the role of predator avoidance as a selective pressure for group-living in primates, but it also suggests that a second benefit of group-living, communal resource defense, might be required to trigger the evolution of sizable groups. Lastly, our model reveals that seemingly small differences in demographic parameters can have profound effects on primate social evolution