Browsing by Author "Roberts, Helen"

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Open Access
CEO Presence on the Compensation Committee: A Puzzle
(Te Herenga Waka—Victoria University of Wellington, 2012) Boyle, Glenn; Roberts, Helen
Conventional wisdom suggests that CEO membership of the compensation committee is an open invitation to rent extraction by self-serving executives. However using data from New Zealand - where CEO compensation committee membership is relatively common - we find that annual pay increments for CEOs with this apparent advantage averaged six percentage points less than those enjoyed by other CEOs during the 1997-2005 period. After controlling for variation in firm performance the difference is a still-sizeable four percentage points. This puzzling result cannot be explained by risk-return tradeoff considerations interaction with other governance variables selection bias or variable mis-measurement.
Open Access
Executive Compensation in New Zealand: the Good, the Bad & the Ugly
(Te Herenga Waka—Victoria University of Wellington, 2004) Boyle, Glenn; Roberts, Helen
Professor Glenn Boyle and Helen Roberts presented Executive Compensation in New Zealand: the Good, the Bad & the Ugly. They report on some broad trends and features of New Zealand executive compensation in the period 1997-2002.
Open Access
Valuing Employee Stock Options: Implications for the Implementation of NZ IFRS 2
(Te Herenga Waka—Victoria University of Wellington, 2005) Boyle, Glenn; Clyne, Stefan; Roberts, Helen
From 2007 New Zealand firms must report the cost of granting employee stock options (ESOs). Market-based option pricing models assume that options are continuously tradable and thus that option holders are indifferent to the specific risk of the firm. ESOs by contrast cannot be traded and so their cost depends on the risk aversion and under-diversification characteristics of the recipient. Using hypothetical ESOs we show that ESO cost is extremely sensitive to employee characteristics thereby casting doubt on the usefulness of any market-based model. Incorporating early exercise in the latter does nothing to resolve this problem because the optimal exercise policy is itself dependent on holder characteristics which are typically unobservable. Vesting restrictions help reduce the magnitude of error.
Open Access
Wolves in the Hen-House? The Consequences of Formal CEO Involvement in the Executive Pay-Setting Process
(Te Herenga Waka—Victoria University of Wellington, 2010) Boyle, Glenn; Roberts, Helen
New Zealand firms exhibit significant variation in the extent to which they formally involve CEOs in the executive pay-setting process: a considerable number sit on the compensation committee while others are excluded from the board altogether. Using 1997-2005 data we find that CEOs who sit on the compensation committee obtain generous annual pay rewards that have low sensitivity to poor performance shocks. By contrast CEOs who are not board members receive pay increments that have low mean and high sensitivity to firm performance. Moreover the greater the pay increment attributable to CEO involvement in the pay-setting process the weaker is subsequent firm performance over one three- and five-year periods.