Evaluating Retirement Planning : The Proper Mix of Investments?

This decision-based case developed from primary sources utilizes disguised names, but actual data to afford students the opportunity to evaluate and suggest changes to a real retirement portfolio. Leon and Billie Reynolds have asked their niece, Stacie, to review their retirement planning. The couple has accumulated just over $1,000,000 in investments with Teachers Insurance Annuity Association (TIAA) and College Retirement Equities Fund (CREF). The case gives the couple’s net worth, current salaries, insights into their spending habits, target retirement ages, family situation, and current allocations of their retirement funds. The case asks students to apply his or her financial planning skills to review the adequacy of the couple’s retirement planning

Rewards to Meet Market Expectations: Evidence of Stock Market Sophistication

Very often, firms report earnings that meet or beat market expectation (MBE). In this study, we empirically document that managers are rewarded more cash bonus when their firm MBE more often, and this relation holds same regardless of the extent of managerial entrenchment. We find that stock market reacts positively overall when firms MBE, but it reacts less positively for firms with entrenched managers. The study shows that stock market is more sophisticated in rewarding firms for meeting or beating market expectation than a firm\u27s cash bonus system does

CEO turnover and compensation: An empirical investigation

CEO turnover events provide a unique opportunity for boards of directors to restructure CEO compensation packages. Consequently, changes and/or adjustments to CEO compensation packages under such circumstances can prove informative to the ongoing debate regarding CEO compensation. This paper investigates the nature of CEO compensation by exploring what happens to such compensation when a management turnover event takes place. Specifically, I examine CEO compensation levels and pay-performance sensitivity for incoming and outgoing CEOs involved in turnover events at public companies in the United States. My main findings are as follows: (1) incoming CEOs are paid as much as or more than those they replace, (2) outsider replacements are paid more than their predecessors even after controlling for education and skills, and (3) CEOs who are forced out are not paid differently from those who replace them, while CEOs who leave voluntarily are paid significantly less than their replacements. Further analysis reveals that proxies for managerial power including CEO tenure, CEO centrality, founder status, and high CEO ownership cannot explain these results. Overall, these findings are difficult to reconcile with the view that managerial power is the primary determinant of CEO compensation