The role of corporate governance and dividend policy as an alignment mechanisms to CEO compensation and firm's performance

Public perception of CEO compensation is evidently unfair as inefficient compensation structures that violate the rights of shareholders result in principal-agent problems. In order to mitigate this issue, theorists argued that executive compensation should be aligned with firm performance. Owing to the prevalence of agency conflicts in Pakistan, this study investigated the effect of firm performance and characteristics on CEO compensation in the capital market of Pakistan. Furthermore, consistent with prior theoretical arguments, this study examined the role of dividend policy and corporate governance as moderators to ensure their effect on pay-performance link. After data cleaning, this study utilized 284 Pakistani- listed companies (PSX) over the period 2010 to 2014. The findings from Multiple Linear regression showed that CEO compensation is positively aligned to operating performance, market performance, firm size and market share, however, no empirical evidence was found regarding the effect of growth opportunities on CEO compensation. The findings also indicated that family owners align their CEO‘s compensation with operating performance, institutional owners with market performance and firm size, and foreign investors with market share. Thus, these ownership structures play vital roles in mitigating agency conflicts in an organization. It was also revealed that optimal board size could strengthen the pay-performance link. On the other hand, CEO duality and dividend policy could distort the pay-performance link. Contrary to theoretical arguments, dividend policy cannot act as a substitute control device in the absence of strong corporate governance. The role of independent directors as an alignment mechanism to operating performance and CEO compensation is evident but due to their lower level of representation on the board, they have no influence over other accounting and market- based performance metrics. The study provides various theoretical and practical implications to improve corporate governance and compensation practices especially in the perspective of Pakistan

Trend of Fast Food Consumption and its Effect on Pakistani Society

Fast food is convenient and tasty though it prepared with low nourishing or unhealthy ingredients. This paper focused on intensity of fast food trend and its effect on Pakistani society. Previous studied had reviewed to rationalize the results. Questionnaire had utilized as a data collection instrument. Microsoft Excel had used for tabulation and graphs while SPSS for descriptive and inferential analysis. Results showed that youngsters spend more money on junk food. Nuclear and Joint both family systems like fast food due to its taste. People like to eat fast food, outside their homes. Hunger can be satisfied with fast food. Moreover, fast food is not a cost effective mean. Fast food also used for the sake of enjoyment and fun. It is also evaluated that prolonged use of fast food is also a cause of health problems, obesity, indigestion problem and high cholesterol. Due to good taste and fluent availability people prefer fast food over home cooked food. Fast food is also a major cause of avoiding proper nutrition. People prefer fast food at their workplace due to their busy schedules. Age and Education have negative correlation with the likeness, consumption and spending money on fast food. However, with the increase in income there will be more likeness toward fast food. Keywords: Fast food, Obesity, high cholesterol, Junk foo

Awareness of Electronic Banking in Pakistan

This research paper focuses on awareness of electronic banking in Pakistan. Electronic banking is today2019;s need as it provides easy way to monitor an account. It reduces cost and save our precious time. There are also some limitations of e-banking as it requires skills to operate it and passwords can be hacked. This research paper discussed that people of Pakistan are well aware of electronic banking but they are not satisfied with the services provided by the bank and they also feel risk in that service that2019;s why they trust more on employees. It contains different demographics and their association with research questions. This paper also includes recommendations in which it describes that what strategies the banks should choose to increase the satisfaction of customers

Rozwój finansowy i zrównoważona konkurencyjność w regionie Arktyki: analiza dynamiczna danych panelowych

The present study investigates the effect of financial development on sustainable competitiveness and its components (natural capital, resource intensity, and social cohesion) in the Arctic region. We employ bank-based, stock-market based, and composite index to measure financial development. To deal with endogeneity bias, system GMM is utilized. The results show a positive and significant effect of financial development on sustainable competitiveness. The estimates also assert that financial development encourages resource efficiency and social cohesion in the region. In contrast, we find the negative effect of financial development on natural capital. This suggests that overexploitation of natural resources may provide short-term benefits to the local and regional communities but it may threaten the long-term sustainability of the Arctic. Thus, the financial sector should be guided to support financing and investing activities in alternative eco-friendly technologies and ventures for reducing excessive natural resource utilization.W niniejszej pracy zbadano wpływ rozwoju finansowego na zrównoważoną konkurencyjność i jej komponenty (kapitał naturalny, zasobochłonność i spójność społeczną) w regionie Arktyki. Do pomiaru rozwoju finansowego stosujemy indeksy bankowe, giełdowe i złożone. Aby poradzić sobie z błędem endogenności, wykorzystywany jest system GMM. Wyniki pokazują pozytywny i znaczący wpływ rozwoju finansowego na zrównoważoną konkurencyjność. Szacunki potwierdzają również, że rozwój finansowy sprzyja efektywnemu gospodarowaniu zasobami i spójności społecznej w regionie. Z drugiej strony dostrzegamy negatywny wpływ rozwoju finansowego na kapitał naturalny. Sugeruje to, że nadmierna eksploatacja zasobów naturalnych może przynieść krótkoterminowe korzyści społecznościom lokalnym i regionalnym, ale może zagrozić długoterminowej stabilności Arktyki. Sektor finansowy powinien zatem kierować się wspieraniem finansowania i inwestowania w alternatywne technologie przyjazne dla środowiska oraz przedsięwzięcia mające na celu ograniczenie nadmiernego wykorzystania zasobów naturalnych

The moderating role of country-specific characteristics on pay-performance relationship in Asian markets: a meta-analysis approach

The purpose of this study is to integrate the findings of the studies related to the relationship between CEO compensation and firm performance in Asian countries. The second concern of the paper is to explore the moderating role of country-specific characteristics on the pay-performance relationship in Asian markets. In order to achieve the study’s objective, meta-analysis technique is utilized through CMA. Basically, the results are analyzed with both the fixed effect and random effect models. however, the assumption of the fixed effect model regarding same true effect size was not fulfilled. Moreover, a higher level of heterogeneity was detected. Therefore, this study ignores the results denoted by the fixed effect model and follows the results prescribed by the random effect model. After eliminating outliers, the findings from 22 studies revealed that CEO compensation in Asian markets is aligned with firm performance but with the small magnitude. Furthermore, the results from the method of moments suggested that there is a positive effect of country’s development and literacy on the pay-performance link, however, the negative effect of gender inequality and Islamic practices are evaluated. Conversely, no significant effect of corruption on the pay performance relationship is purported in the study. As the authors find the influence of country-specific characteristics on the pay-performance relationship in Asian markets, this study confirms the need for enhancing pay-performance sensitivity in Asian markets to mitigate potential agency conflicts

Nastroje inwestorów wywołane przez COVID-19 i reakcje rynku w ekstremalnych warunkach meteorologicznych: dowody z sektora czystej energii w regionie Azji i Pacyfiku

The unprecedented global economic and social crisis caused by the coronavirus outbreak has not spared the energy sector. Using a dynamic model, we investigated the effect of COVID-19 cases on investor sentiments and stock returns of clean energy in the Asian-Pacific region. The results show that coronavirus cases negatively affect stock returns using investor sentiments as a transmission channel. We also find a negative effect of air pollution on stock returns. Since COVID-19 restricted trade and plummeted the oil prices, economies relied on non-renewable sources to meet energy demands. Nevertheless, the investor’s optimism and high sentiment level may deteriorate this link. On the other hand, we do not find any significant effect of low-high temperature on either investor sentiments or clean energy stock returns. Clean energy stocks were viewed as more sustainable and less vulnerable to external shocks, however, the fear and pessimism among investors induced by corona-virus are spilled over the renewable energy sector.Bezprecedensowy globalny kryzys gospodarczy i społeczny wywołany wybuchem koronawirusa uderzył także w sektor energetyczny. Korzystając z modelu dynamicznego, zbadaliśmy wpływ COVID-19 na nastroje inwestorów i stopy zwrotu w sektorze czystej energii w regionie Azji i Pacyfiku. Odkąd COVID-19 wpłynął negatyw-nie na handel i przyczynił się do gwałtownego spadku ceny ropy, wiele gospodarek wsparło odnawialne źródła energii, aby zaspokoić zapotrzebowanie na energię. Wyniki pokazują jednak, że koronawirus negatywnie wpływa na stopy zwrotu. Stwierdzamy również negatywny wpływ zanieczyszczenia powietrza na stopy zwrotu. Z drugiej strony nie widzimy istotnego wpływu zmian temperatury ani na nastroje inwestorów, ani na stopy zwrotu z czystej energii. Akcje czystej energii były postrzegane jako bardziej zrównoważone i mniej podatne na wstrząsy zewnętrzne, jednak strach i pesymizm inwestorów wywołany koronawirusem może wpłynąć nega-tywnie na sektor energii odnawialnej

The moderating role of risk-taking between CEO compensation and firm performance: evidence from financial sector of Pakistan

Although the trend of pay for performance has been increased since last few years but still it is a controversial argument if CEO compensation actually increase the firm performance. It is also argued by prior studies that performance based CEO compensation increase the potential risk of the firm which could further effect the long-term firm negatively. This study attempts to illustrate the impact of CEO compensation on firm performance (operating and market performance) along with the moderating role of risk-taking among these variables. The total 66 financial firms and banks listed on Karachi Stock Exchange has been included under the investigation from the year 2010 to 2014. In addition, Hierarchical linear regression has been employed to analyze the results though the assumption were precisely fulfilled. The results shows the significant negative impact of CEO compensation on operating performance which could be due to the high managerial power, cronyism, rent extraction or weak corporate governance. Nevertheless, the study revealed significant positive impact of CEO compensation on market performance but solely this determinant can be relied as a strong predictor of market performance due to lesser effect size of the model. Therefore, it is suggested that futuristic studies in this context should include different other control variables (corporate governance mechanisms, economic variables etc.) to improve the model’s goodness of fit. Additionally, this study does not find any moderating role of risk-taking between CEO compensation and firm performance (both operating and market

Does Risk-taking Moderates Relationship between CEO Compensation and Firm’ Performance?

Trend of pay for performance has increased since last few years but still it is a controversial argument if CEO compensation actually increases the firm performance. Prior studies argue that performance based CEO compensation increase the potential risk of the firm, which could further affect the long-term firm negatively.This study attempts to illustrate the impact of CEO compensation on firm performance along with the moderating role of risk-taking among these variables.Using hierarchical linear regression, the results shows the significant negative impact of CEO compensation on operating performance which could be due to the high managerial power, cronyism, rent extraction or weak corporate governance.Nevertheless, the study revealed significant positive impact of CEO compensation on market performance but solely this determinant cannot be relied as a strong predictor of market performance due to lesser effect size of the model. Additionally, this study does not find any moderating role of risk-taking between CEO compensation and firm performance

The Moderating Role of Dividend Policy in Aligning the Accounting and Market based performance Measures with CEO Compensation

This study aims to report the results of an investigation into the effect of accounting and market based performance measures on CEO compensation along with the moderating role of dividend policy. The study has utilized hierarchical multiple regression on a sample of 66 financial companies/banks listed on Karachi Stock Exchange (KSE), for a 5-year period (2010-2014). The results indicate that there is positive and significant impact of accounting based measures (operating performance and firm size) on CEO compensation. In case of market-based measures only growth opportunities have significant and positive impact on CEO compensation. Significant negative impact of market share and insignificant effect of market performance on CEO compensation has been revealed. Contrary to agency theory, this study finds that dividend policy is not utilized as a substitute control device. Additionally, dividend policy cannot mitigate agency conflicts in financial sector of Pakistan due to its ineffective role as aligning mechanism. Overall, the results imply that inefficient dividend policy can further distort the pay-performance link

Significant Analysis for Financial Statements: An Empirical Study of National and Unilever Foods

Choosing vital, reliable and hustle free analysis is a bit difficult situation for most of the financiers and managers as there are so many analyses. This study focuses on most significant analyses to perform on financial statements. To accomplish this study, financial statements of two companies, Unilever foods and National foods has selected to perform analysis. Results show that vertical analysis can be a suspicious analysis as it total assets and sales fluctuate gradually. Horizontal analysis is somehow better analysis than vertical analysis as it shows negative or positive trend of variables. DuPont analysis is a reliable analysis but it taken into consideration only two years. However, ratio analysis is seems to be best analysis as it gives concise and paramount review of firm’s performance. According to these analyses, Unilever Foods is better corporate than National Foods. Further results are discussed in the light of these analyses. Keywords: Vertical analysis, Horizontal analysis, DuPont analysis, Ratio analysi