Kevin J. Sigler

Challenges of employee retention

Outlines the difficulty of retaining new employees covering the problems, costs and methods used to retain productive employees. Suggests that there is often insufficient data regarding initial employee performance and the lack of incentives for better performers who are often treated equally with under performers. Considers the costs and benefits of using employment agencies. Briefly considers the use of pay as an incentive, including bonuses and stock ownership and job satisfaction through good job design to increase variety.

CEO compensation and healthcare organisation performance

Posits that most studies have found a significant, yet weak, link between the compensation of the CEO and the company’s performance. Herein extends research by focusing on an individual industry, building a model using only data from healthcare organisations. This article tests the relationship using data from 23 healthcare organisations.

The CEO pay‐performance relationship: pooled vs. industry models

Summarizes previous research on the links between chief executive officer (CEO) compensation, firm performance and industry; and compares pay‐performance relationships calculated by pooling data with those based on industry segmentation. Develops a model incorporating six factors which may affect CEO cash compensation (tenure, net company income, income variance, net sales, returns to shareholders and beta) and uses 1986‐1992 data from a sample of large US firms covering eight industries to test it. Shows, using Andrew’s Sine Technique regression, that there is a wide variation between individual industries which is obscured when data is pooled. Discusses the methodology used, consistency with other research, the limitations of the study and the underlying reasons for the findings.

A brief overview of executive stock options in reducing the agency problem of excessive risk aversion

Purpose – The purpose of this paper is to discuss how executive stock options help in reducing agency costs in the firm and to address problems experienced by the firm when stock options are used as incentives. Design/methodology/approach – The paper initially discusses types of agency problems caused by company managers and then explains why stock options can reduce the problem of excessive risk aversion displayed by some managers. It then addresses the problems that may occur with the introduction of executive stock options by the firm and finally offers methods to reduce these problems. Findings – The paper explains the methods available to reduce the problems caused by executive stock options such as indexing the stock options to the S&P 500 index and structuring the Board of Directors in a manner that helps ensure the stock options are used appropriately. Originality/value – This paper is valuable to firms using executive stock options as incentives to managers. It outlines the problems stock options can help solve and the problems which may occur by their use. In addition, the ways to reduce the problems produced by executive stock options in the firm are discussed.

CEO Pay Complexity Necessary to Reduce Agency Problems

The components of chief executive officer (CEO) pay are numerous and complex. Top managers are hired to work in the shareholders’ interests, which are to maximize the wealth of the owners. But CEOs are human and are concerned in maximizing their own utility of wealth. This desire may run counter to the shareholders’ interests, resulting in agency costs. It appears that the complex manner in which a CEO is paid is designed to provide an incentive to the top manager to carry out the goals of stockholders and reduce agency problems.

NBA players: are they paid for performance?

This paper studies the relationship between NBA players’ salaries and their performance on the basketball court. In other industries executive compensation has been found to have a weak yet significant link to company performance. We find a positive and significant relationship between an NBA player’s salary and a player’s points per game and rebounds per game for 1997‐98 basketball season. These results may be improved by considering qualitative factors and including more years of data.

How to pay the bank CEO

Explores a US bank CEO’s ideal compensation package as a way of attracting and retaining talented individuals. States that there must be a competitive base salary but that total compensation should include car, housing, retirement and health benefits., and stock options. Notes that the federal tax package has placed a limit on eligible compensation and mentions supplemental executive retirement plans (SERPS) as a way of compensating for this. Links pay with bank performance; the CEO’s cash bonuses are tied to the bank’s performance to ensure that the CEO acts in the best interests of the bank and its shareholders. Observes fluctuations in total compensation packages due to tenure, returns on average assets, bank revenues and net incomes or profits of the bank.

Rules for withdrawing money from tax deferred retirement plans and portfolio value implications

Explains the new US tax rules for calculating the required minimum distributions from employer‐sponsored qualified retirement plans, 403(b) plans and individual retirement accounts, pointing out that when the owner of a tax‐deferred retirement account dies the beneficiary of the fund becomes liable for tax. Gives numerical examples to illustrate the application of the rules.

Investing for retirement

Outlines some research on the effects of risk on portfolios for retirement planning and puts forward a method to help individuals “increase their chances of not outliving their retirement portfolios”. Uses numerical examples to show how calculations of the savings needed to achieve specific retirement incomes may prove inaccurate, and how regular portfolio assessment can be used to make any necessary adjustments during the accumulation and/or the retirement stage.