Board Compensation and Ownership Structure: Empirical evidence for Italian Listed Companies

This paper investigates the relationships among corporate ownership, the level of board compensation, and firms future performance within Italian listed companies. Board compensation could be related to corporate ownership characteristics, like type of controlling shareholder, ownership concentration, the separation between cash flow and voting rights, and the presence of shareholders agreements. The evidence of high levels of board compensation associated with certain governance characteristics could signal, in a principal-agent framework, rent extraction by entrenched managers or by controlling shareholders versus minority shareholders; high board compensation, however, could be related to the need to hire directors with higher professional standing and also to the desire to create a network with other companies through the enlargement of the board, according to a social network view. In this paper we disentangle this issue showing the relationship between excess board compensation and future performance: examining firms listed on the Milan Stock Exchange over the period 1995-2002, we show that board compensation is linked to many governance characteristics, but excess compensation is never positively related to future performance. For founder Family firms, in particular, high board compensation is associated with a) smaller board size; b) a higher proportion of family members on the board; c) lower future performance. The whole evidence therefore doesn t support the hypothesis suggested by the social network view, but is consistent with a rent extraction hypothesis. These results could add new empirical evidence to the recent debate on the need for global remuneration reform. According to our results, some control mechanism or an increase in transparency of executive compensation schemes could be appropriate

Ownership structure, investors\u2019 protection and corporate valuation: the effect of judicial system efficiency in family and non-family firms

Research on the effect of ownership structure on firm performance shows no convergent evidence concerning the sign and form of the above-mentioned relationship. Similarly, there is no homogeneous evidence documenting family ownership concentration is always positively or negatively correlated with firm value, or irrelevant. This paper analyses whether and how the de facto investor protection provided by the judicial system affects the relationship between corporate performance and ownership structure in 1314 firms operating in four European countries (Germany, France, Italy, and Spain) over a five-year period, 2010\u20132014. Moreover, we analyse whether judicial system efficiency influences if and how family firms in the controlling coalition collude for expropriating minority shareholders. Our findings show that the level of shareholder protection, derived from judicial efficiency, is relevant to the relationship between ownership structure and firm performance, thus corroborating literature in that institutional contexts matter in explaining such relations. The results suggest the need for more efficient external mechanisms of corporate governance to facilitate investment in equity capital, thus decreasing the country risk perceived by investors

HTRA proteases: regulated proteolysis in protein quality control

Controlled proteolysis underlies a vast diversity of protective and regulatory processes that are of key importance to cell fate. The unique molecular architecture of the widely conserved high temperature requirement A (HTRA) proteases has evolved to mediate critical aspects of ATP-independent protein quality control. The simple combination of a classic Ser protease domain and a carboxy-terminal peptide-binding domain produces cellular factors of remarkable structural and functional plasticity that allow cells to rapidly respond to the presence of misfolded or mislocalized polypeptides