Does Degree Earned Matter? An Empirical Analysis Of CEOs From Large Firms

In this paper the educational backgrounds of the Highest Paid Chief Executive Officers (CEOs) in the United States are examined.  Specifically, the extent to which the specific degree earned affects the salary received and other variables are examined.  The data for the study is the Forbes 800 CEO compensation data.  The time period for this study is the thirteen years from 1987-1999.  The results indicate that the total compensation that individuals earn as the CEO of the firm depends upon the undergraduate and graduate degree that the individual earns. Those with differing degrees are found to have been with the firm for a differing number of years, earned their undergraduate and graduate degrees at different ages, started working for the firm at different ages, became the CEO at differing ages, and were with the firm for differing number of years prior to becoming the CEO

Optimal Tax Deferral Choices In The Presence Of Changing Tax Regimes

In this paper the attractiveness of tax-deferred and non-deferred investments in periods of changing tax regimes are examined.  Specifically the desirability of deferring taxes given one’s current tax rate, estimate of future tax rates, number of years until retirement, and the expected rate of return on investment is explored.  Under some combinations of tax rates and investment horizons, tax deferral is found to be undesirable while in others it is found to be desirable.  Using the formulas and tables developed here, an individual can identify the rate of return on investment at which he is indifferent between deferring and not deferring, rates at which tax deferral is preferred and rates at which tax deferral is inferior.  In addition, the sensitivity of the decision to the timing of future tax rate changes is explored.  This research provides investors a more comprehensive understanding of the factors that determine optimal tax deferral choices and will permit investors to make better tax deferral decisions

Portfolio Issues Of Mobilization Insurance: What Went Wrong And Candidate New Offerings

Financial hardships experienced by those in the military are well documented.  Mobilization insurance has the potential to reduce the financial burdens of being called to active military duty.   Reducing the financial burden of being called to active duty can provide numerous benefits to the military and Reservists including improved recruiting, lower attrition, and reduced stress on activated Reservists. In this paper, the Ready Reserve Mobilization Income Insurance Program and the reasons for its failure are discussed.  The portfolio characteristics of the stakeholders involved in the Reserve system are analyzed in an options pricing framework and a discussion of how a new mobilization insurance product might be structured is examined. While the concept of offering such insurance is simple enough, no known academic research has analyzed the financial positions of Reserve system stakeholders

Does Educational Background Affect CEO Compensation And Firm Performance?

This paper examines the educational background of Chief Executive Officers (CEOs) from large U.S. firms. Forbes CEO compensation lists and Compustat data covering 500 or more firms annually are utilized in the analysis for the period 1997-2006.  Universities are ranked based on the number of graduates placed in top CEO positions and of the total compensation their graduates earn as CEO.  Results show a select group of schools educate a large proportion of top CEOs.  Harvard dominates the CEO market at all educational levels.  Results show low correlation between university placement rankings and compensation rankings.  Regressions on CEO compensation provide additional insights into CEO compensation determinants. Regressions of CEO educational variables on firm performance measures identify links between CEO education and firm performance.  This is the first known paper to examine CEO gender as a determinant of compensation and firm performance.  The evidence here provides hiring and compensation committees valuable information on appropriate hiring, retention and compensation strategies.  It also provides government officials additional insights for designing appropriate regulations

The Relationship Between CEO Gender, Financial Performance, And Financial Management

In recent years, the number of female Chief Executive Officers (CEO’s) at large firm’s has increased to the point that it is possible to statistically compare the performance and management characteristics of firms managed by CEO’s of different genders. This paper is an exploratory study that examines the relationship between CEO gender and the performance and management of publicly traded firms. We use a large dataset of annual Forbes CEO data, combined with Compustat data, covering the time period of 1997 to 2006. Our results show that CEO gender is related to a number of factors including inside ownership and return on assets

Does School Matter? An Empirical Analysis Of CEO Education, Compensation, And Firm Performance

In this paper the educational background of the Chief Executive Officers (CEOs) of Large U.S. Firms are examined.  Specifically, the educational background of CEOs from large U.S. firms, as identified in the Forbes 800 Compensation List, are examined.  Information concerning the number of Chief Executive Officers that received their undergraduate and graduate degrees from 463 institutes of higher education are compiled.   We find that most CEOs have an undergraduate degree, while about half possess a graduate degree.  The results indicate that there are preferred educational backgrounds for selection as the CEO of a major corporation.  We also examine how the educational background of the CEO is related to the CEO’s total compensation.  The evidence indicates that those CEOs that do not have a degree earn significantly more than those CEO’s that do have a college degree.  We find little evidence that the school attended affects the compensation that the CEO receives.  Finally, we examine firm ROA and Tobin’s Q based on the educational background of the CEO.  We find an association between possession of a degree as well as where the degree was earned and the ROA and Tobin’s Q of the firm.

Does AACSB Accreditation Matter? Evidence From Large Firm CEOs

Accreditation from the Association to Advance Collegiate Schools of Business (AACSB) is highly sought after by business schools both in the United States and internationally. Business schools devote considerable resources to earn and maintain the accreditation. Despite this effort and expense, surprisingly little literature has examined the extent to which AACSB accredited schools outperform non-accredited schools in market driven situations. This exploratory study is a first effort to fill this gap in the literature. The research here examines CEOs from large U.S. firms. Specifically, compensation earned by CEOs from AACSB accredited schools are compared to compensation earned by CEOs from non-accredited schools. We also examine the extent to which CEOs from accredited and non-accredited schools manage their firms differently and earn higher profits than other CEOs. The findings indicate that a large proportion of large firm CEOs earned their degree from an AACSB accredited school. The empirical findings are mixed, but the general picture is that graduates from AACSB accredited schools do not outperform other CEOs

Advances In Teaching The Time Value Of Money

Students frequently experience difficulty in identifying the appropriate time value of money (TVM) technique to apply to a TVM problem.  This paper offers a modification of a recently published TVM technique developed by Jalbert (2002) in order to help students understand and solve TVM problems.  The modified technique developed here simplifies the previously developed technique by reducing the number of questions that students must examine to arrive at the appropriate TVM technique for a problem.  In addition, the technique developed here eliminates the need for students to learn annuity techniques altogether.  As such, the technique developed here specifically intends to meet the needs of students who experience difficulty in understanding annuities.  Modified visual aids are provided to assist students in selecting correct techniques.  By using these techniques, students will find it much easier to identify appropriate TVM techniques