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

Stock Options as Incentive Contract 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

Monetary Cross-Checking in Practice

Ever since the European Central Bank presented its monetary policy strategy on the basis of two pillars "economic" and "monetary" analysis with the latter being used as a cross-check of the first it has been criticized for giving too much importance to monetary aggregates. Opponents argue these aggregates are largely unrelated to monetary policy and provide little or no relevant information. Supporters have instead referred to the success of the Bundesbank in controlling inflation by using monetary targets during the 1970s and early 1980s. Furthermore, loose monetary conditions in the 2000s are viewed by many as a driver of excessive growth of credit and asset prices that set the stage for the global financial crisis. We use a formal characterization of monetary cross-checking and go on to study its role in policy practice empirically. Firstly, we derive historical measures of monetary conditions using this definition of cross-checking for Germany from the 1970s to 1998 and for the euro area since then. We investigate when monetary cross-checking would have called for significant adjustments in interest rate policy. Secondly, we test empirically whether interest rate policy responded to significant deviations of money. Such cross-checks induce a nonlinear shift in rates based on a threshold in terms of filtered money growth. Our estimates of threshold autoregressive models indicate that the behavior of the Bundesbank can well be described by a standard Taylor interest-rate rule augmented by a nonlinear component which induces an interest-rate adjustment when a filtered money growth measure exceeds an empirically specified threshold. Concerning the policy making of the ECB, we find supportive evidence for Trichet s(2008) claim of an interest-rate adjustment induced by a signal from monetary cross-checking at the end of 2004. However, our empirical results would have suggested an even larger (and earlier) response

Extraction and Integration of Genetic Networks from Short-Profile Omic Data Sets.

Mass spectrometry technologies are widely used in the fields of ionomics and metabolomics to simultaneously profile the intracellular concentrations of, e.g., amino acids or elements in genome-wide mutant libraries. These molecular or sub-molecular features are generally non-Gaussian and their covariance reveals patterns of correlations that reflect the system nature of the cell biochemistry and biology. Here, we introduce two similarity measures, the Mahalanobis cosine and the hybrid Mahalanobis cosine, that enforce information from the empirical covariance matrix of omics data from high-throughput screening and that can be used to quantify similarities between the profiled features of different mutants. We evaluate the performance of these similarity measures in the task of inferring and integrating genetic networks from short-profile ionomics/metabolomics data through an analysis of experimental data sets related to the ionome and the metabolome of the model organism S. cerevisiae. The study of the resulting ionome-metabolome Saccharomyces cerevisiae multilayer genetic network, which encodes multiple omic-specific levels of correlations between genes, shows that the proposed measures can provide an alternative description of relations between biological processes when compared to the commonly used Pearson's correlation coefficient and have the potential to guide the construction of novel hypotheses on the function of uncharacterised genes

Scaling laws of solar and stellar flares

In this study we compile for the first time comprehensive data sets of solar and stellar flare parameters, including flare peak temperatures T_p, flare peak volume emission measures EM_p, and flare durations t_f from both solar and stellar data, as well as flare length scales L from solar data. Key results are that both the solar and stellar data are consistent with a common scaling law of EM_p ~ T_p^4.7, but the stellar flares exhibit ~250 times higher emission measures (at the same flare peak temperature). For solar flares we observe also systematic trends for the flare length scale L(T_p) ~ T_p^0.9 and the flare duration t_F(T_p) ~ T_p^0.9 as a function of the flare peak temperature. Using the theoretical RTV scaling law and the fractal volume scaling observed for solar flares, i.e., V(L) ~ L^2.4, we predict a scaling law of EM_p ~ T_p^4.3, which is consistent with observations, and a scaling law for electron densities in flare loops, n_p ~ T_p^2/L ~ T_p^1.1. The RTV-predicted electron densities were also found to be consistent with densities inferred from total emission measures, n_p=(EM_p/q_V*V)^1/2, using volume filling factors of q_V=0.03-0.08 constrained by fractal dimensions measured in solar flares. Our results affect also the determination of radiative and conductive cooling times, thermal energies, and frequency distributions of solar and stellar flare energies.Comment: 9 Figs., (paper in press, The Astrophsycial Journal

Outflow obstruction after living donor liver transplantation managed with a temporary vena cava filter:A case report

Introduction: Outflow obstruction is a rare but critical vascular complication in liver transplantation, which may lead to graft loss and mortality. We report a case of caval vein outflow obstruction due to retrohepatic compression after living donor liver transplantation (LDLT), which was managed by temporary implantation of a vena cava filter. Presentation of case: A 63-year-old male with end stage liver disease presented with caval vein outflow obstruction and massive ascites 12 days after right lobe LDLT. We opted for a minimally invasive approach and implanted a vena cava filter at the compressed site through transjugular route. The patient's ascites drainage significantly decreased and graft function maintained stable after the intervention. On day 50 posttransplant, the filter was successfully removed and the patient was discharged without complications. Discussion: Outflow obstruction after liver transplantation can result from anastomotic stenosis, graft size mismatch, thrombosis or compression of the outflow tract. Various management strategies have been employed both peri- and posttransplant, ranging from surgical interventions to minimally-invasive techniques. The treatment strategy should be tailored to the individual case, considering the timing of presentation and the specific cause for the obstruction. Conclusion: We successfully managed a case of compressive outflow obstruction by temporary implantation of a vena cava filter after LDLT. The vena cava filter was safely removed under angiography.</p

G Protein-Coupled Inwardly Rectifying K+ Channels (GIRKs) Mediate Postsynaptic but Not Presynaptic Transmitter Actions in Hippocampal Neurons

AbstractTo study the role of G protein-coupled, inwardly rectifying K+ (GIRK) channels in mediating neurotransmitter actions in hippocampal neurons, we have examined slices from transgenic mice lacking the GIRK2 gene. The outward currents evoked by agonists for GABAB receptors, 5HT1A receptors, and adenosine A1 receptors were essentially absent in mutant mice, while the inward current evoked by muscarinic receptor activation was unaltered. In contrast, the presynaptic inhibitory action of a number of presynaptic receptors on excitatory and inhibitory terminals was unaltered in mutant mice. These included GABAB, adenosine, muscarinic, metabotropic glutamate, and NPY receptors on excitatory synapses and GABAB and opioid receptors on inhibitory synapses. These findings suggest that a number of G protein-coupled receptors activate the same class of postsynaptic K+ channel, which contains GIRK2. In addition, the GIRK2 channels play no role in the inhibition mediated by presynaptic G protein-coupled receptors, suggesting that the same receptor can couple to different effector systems according to its subcellular location in the neuron