Get our free book (in Spanish or English) on rainwater now - To Catch the Rain.

Changes

Jump to: navigation, search

CEO Utility Pay Literature Review

2,138 bytes added, 15:46, 9 February 2016
CEO Compensation in a Regulatory Environment: An Analysis of the Electric Utility Industry
===CEO Compensation in a Regulatory Environment: An Analysis of the Electric Utility Industry===
[http://jaf.sagepub.com/content/12/3/223 S. Bryan and L. Hwang, “CEO Compensation in a Regulatory Environment: An Analysis of the Electric Utility Industry,” Journal of Accounting, Auditing & Finance, vol. 12, no. 3, pp. 223–251, Jul. 1997.]
*possible source: joskow et al. 1993, 1996*ways regulation affects CEOs::*restrict decisions and actions of CEOs:*reduce investment opportunity set:*regulatory commissions reduce information asymmetry:*political constraints on board of directors*Hypothesis are included throughout paper.*Information sources::*Rankings of a regulatory environment, Merrill Lynch:*Holding company status, Moody's Public Utilities Manual:*percentage of power generated from nuclear, Moody's Utilities Manual and Value Line Investment Survey:*Incentive regulation, Landon 1993:*Revenue requests and approvals, Public Utilities Fortnightly:*Regulatory lag, Public Utilities Fortnightly*data from 1990-1995*Table 1 shows compensation component values by year*Results::*Incentive regulation has been around since the 1980s:*longer regulatory lag means a higher likelihood of unfavorable regulatory climate:*electric utilities with incentive regulation are more likely to have greater public scrutiny and political constraints:*those with nuclear as a major power source are more likely to have incentive regulation and have a less favorable regulatory environment:*utilities with incentive regulation have a greater regulatory lag (time between rate request & approval dates):*more regulatory lag gives greater scrutiny and political constraints:*those with holding companies have a shorter regulatory lag, have a better regulatory climate, and have a smaller chance of being under incentive regulation.*Compensation(comp) and the proportion of incentive pay(incentive) Results::*Comp and incentive are higher for holding companies. Other factors do not change:*Comp and incentive increase for nuclear plants. (riskier):*incentive regulation lowers comp and incentive:*regulatory environment (favorable) increases comp and incentive:*longer regulatory lag and more frequent rate requests lower incentive:*Overall, compensation and incentive are higher for firms that have a less rigid regulatory environment.:*Incentive increases with larger firms, firms with less assets, firms with more growth opportunities, firms with more risk
===Ownership, Regulation, and Managerial Monitoring in the Electric Utility Industry===
489
edits

Navigation menu