Catálogo de publicaciones - libros

U.S. executive compensation traditionally relies on stock options that vest over time. Recently, however, a growing number of institutional investors have called for the use of performance-vested options that link vesting to the achievement of performance targets. We examine the factors influencing the structure of performance-vested stock option grants to U.S. CEOs. We find that performance-vested options comprise a greater proportion of equity compensation in firms with lower stock return volatility and market-to-book ratios, and in those with new external CEO appointments, providing some support for theories on the options’ incentive and sorting benefits. However, firms with larger holdings by pension funds are less likely to completely replace traditional options with performance-vested options, and make traditional options a greater percentage of option grants, suggesting that token performance-vested option grants may also be used to placate pension funds that are calling for their use. In addition, our exploratory examination of performance-vesting criteria finds similarities and differences to prior studies on the choice of performance measures in compensation contracts.

This paper presents a fictional case study of an aerospace firm’s analysis of whether to undertake a new missile program for sale in foreign markets. The adoption of this new program will affect fully allocated accounting costs on all of its programs. The issue explored is whether and how the firm ought to take into account the fact that the prices it receives on many of the products it sells to the U.S. government are based on fully allocated accounting costs and how this potentially affects the firm’s incentives to produce as efficiently as possible

The FASB and IASB are reexamining and revising their existing conceptual frameworks. A conceptual framework consists of (1) objectives and (2) concepts that follow logically from those objectives. Most attention is being paid to the concepts, seemingly accepting the objective of wealth measurement. This paper suggests reconsideration of wealth measurement as the objective. Christensen and Demski (2003) suggest two views of accounting objectives: (1) the “value school” based on wealth measurement and (2) the “information content school” based on measuring and disclosing informative events. They make a case for the latter as the most logical objective of accounting. If one accepts the information-content approach to accounting, quite different concepts may arise. For example, the FASB and IASB are on record favoring the balance sheet approach over the revenue and expense approach. This is logical if wealth measurement is an appropriate objective. However, under the information content approach, the revenue/ expense approach, essentially focusing on the flows, which more directly reflect the events affecting an entity, may more logically follow. The revenue/expense approach seems to better align with the disclosure of information events and states.

Joel S. Demski’s work is characterized by the austere discipline of applying the economizing principle to accounting and management phenomena. In natural sciences optimization is used as a structural principle for understanding the organization of the physical universe. As social scientists applied it to our self-conscious selves, economizing acquired a behavioral interpretation, leading to unnecessary and avoidable confusion with the findings of cognitive sciences. Important aspects of aggregate level outcomes of social phenomena are structural. The use of the economizing principle for understanding social phenomena in general, and accounting in particular, has been highly productive, and it is not in conflict with cognitive limitations of human individuals. Demski’s work defines the application of this powerful principle to problems of accounting.