Impact of Acquisitions on CEO pay

I examine the impact of acquisition on the pay of CEOs of S&P 1500 firms from 1994-2010. I find insignificant effect of firm performance on post-acquisition CEO pay. Controlling for firm size, CEOs are paid a premium in post-acquisition pay. I find no evidence of differential pay increase for domestic and international acquisitions. Post-acquisition increase in CEO pay is not contingent on the wealth effects and CEOs are not penalized for 'wealth-reducing' acquisitions. I find evidence that a part of acquisition premium in CEO pay can be attributed to the strength of governance. Controlling for survivor bias, the effect of acquisition on CEO pay is downward adjusted

Why are CEOs commenting on racial injustice?

They speak out not to promote their personal views but because it benefits the company’s bottom line, writes Swarnodeep Homroy

Female directors, key committees, and firm performance

There is pressure to increase female representation on corporate boards. A number of studies have found no, or in some cases a negative, effect of female representation on boards and firm performance. We demonstrate robust positive and economically meaningful effects on firm performance of female representation on European boards. Moreover, while previous work has considered female representation broadly, we focus on membership of committees involved explicitly in firm governance. We demonstrate marked, larger, e¤ects on performance of having female representation on these committees. Finally, we reconcile this evidence with prior US and UK evidence and demonstrate a positive performance impact of female committee memberships. Our evidence is supportive of the expansion of female involvement in corporate governance from a financial performance perspective

The Structure of Corporate Holdings and Corporate Governance: Evidence from India

This paper examines how the structure of corporate holdings impacts upon the corporate governance mechanisms and outcomes. Using a panel data of 500 large listed Indian …firms we compare …firms with dispersed equity ownership, and business group …firms with cross-holdings and concentrated family ownership, within the same institutional frameworks. Contrary to the popular hypothesis that concentrated shareholding leads to worse corporate governance outcomes, we find that the corporate governance outcomes are similar for both types of …firms, even though the incentive alignment mechanisms may be different. The results of this paper suggest that corporate holding structures and governance mechanisms adjusts to optimize value and performance

MPs and outside business interests: the value of political-corporate connections

In 2002, an amendment to parliamentary regulations removed restrictions on the participation of MPs in proceedings related to their corporate interests. Colin Green and Swarnodeep Homroy demonstrate how both firms and politicians changed their behaviour as a result. Post-amendment, firms were more likely to appoint MPs on their boards and reduce political donations. MPs with corporate connections were more likely to become members and attend meetings of select and joint committee

Do social policies foster innovation? Evidence from India's CSR regulation

We examine the effect of social policies on corporate innovation using India's mandatory Corporate Social Responsibility (CSR) regulation. This regulation mandates firms with pre-tax profits above a certain threshold to spend 2 % of the profits on CSR. We demonstrate a significant bunching of companies just below the profit threshold post-regulation compared to the pre-regulation period. Firms close to the profit threshold manipulate their earnings to avoid compliance by increasing their R&D expenses. We show that, on average, firms that increase R&D expenses to avoid the regulation apply for one more patent and announce two new products. The increase in R&D expenses and patenting is concentrated in firms with a prior history of innovation. Our results suggest that social policies can generate indirect incentives for innovation

The impact of diversity on group and individual performance

Using data on a student group project in which groups are exogenously formed, we examine the potential productivity gains from employing work-teams which are diverse in terms of gender, nationality and ability. We find no significant effect of diversity on overall team performance, except when the team members are from different socio-cultural backgrounds. More importantly, we find that students who have worked in more diverse teams experience a subsequent improvement in individual productivity. These individual productivity gains hold for both domestic and foreign students, and for students of different levels of ability. Our results suggest a mechanism by which diversity enhances individual and collective performance

SELF-DRIVEN ISSUE TACKLING AID

Current network monitoring and health visualization tools and systems provide the results of their analysis only in the form of a report. To address that limitation, techniques are presented herein that support a range of enhancements to such tools. One such enhancement allows the tools to automatically diagnose an issue, and provide a solution to the same, using predictive analysis. Another such enhancement encompasses training the tools to provide detailed and forthright solutions to an end user. Accordingly, aspects of the techniques encompass a solution-oriented approach and support a monitoring and solutioning tool MAST that is able to interact with both an end-user and the different devices within a managed network

Board expertise, networked boards and environmental performance

We analyze the role of board expertise in environmental issues (measured by the presence of non-executive directors with previous experience in environmental issues, EEDs) and director networks on GHG emissions. Using emission data of FTSE 350 firms, we show that the presence of EEDs on the board reduces GHG emissions. Also boards with better networked directors have better environmental performance. These associations are robust to alternative explanations - endogenous matching of firms and directors, general technical expertise of the board, and pro-active stacking in board composition. The results are consistent with the view that director skills and information spillovers through director networks add value