Underwater options and the dynamics of executive pay-to-performance sensitivities

Article Abstract:

Analysis of the decline in dynamics of executives' pay-to-price sensitivities suggest that the decrease in stock prices is mainly because of the option granting behavior of the companies, which offsets the decline. The effect of changes in stock prices over the pay-to-performance sensitivities of the executives is discussed in detail.

United States, Management Compensation, Executives, Executive compensation

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The ability of earning to predict future operating cash flows has been increasing--Not decreasing

Article Abstract:

The relationship between earnings and one-year-ahead operating cash flows from 1973 to 2000 is investigated. The result indicates an increasing relationship between earning and one-year-ahead operating cash flow, despite a decreasing relationship between stock prices and earnings over time.

Comparative analysis, Wages, Wages and salaries, Cash flow, Salary

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EVA versus earnings: does it matter which is more highly correlated with stock returns?

Article Abstract:

Economic value added (EVA) is one of the most prominent alternatives to the traditional accounting based performance measures. In order to address the on going debate, an agent model which divides contracts into two accounting based performance measures including stock price, is proposed.

Return on investment, Rate of return, Economic value added

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