part 7

[Audio] Dear students welcome to our presentation on the role of compensation in corporate governance. Today we will be discussing the relationship between executive compensation and takeovers and how this impacts financial market equilibrium and corporate governance. Throughout this presentation we will be using various scholarly articles and research papers to support our arguments. These articles cover topics such as the dual role of boards as advisers and monitors the impact of legal restrictions on private contracts large shareholder activism and the role of contracts as a barrier to entry. One article that we will be discussing is by Abowd and Kaplan which poses six important questions that need to be answered regarding executive compensation. Another by Adams delves into the dual role of boards as both advisers and monitors. Admati Pfleiderer and Zechner examine the impact of large shareholder activism on financial market equilibrium. We will also be looking at how legal restrictions on private contracts can actually enhance efficiency a concept explored by Aghion and Hermalin. Additionally the authors Aghion and Tirole discuss the formal and real authority within organizations and how it affects corporate governance. Aghion and Bolton's work on contracts as a barrier to entry will also be discussed as well as their approach to financial contracting. Lastly we will explore exit options in corporate finance specifically the trade-off between liquidity and incentives as studied by Aghion Bolton and Tirole. These articles and research papers are crucial in helping us understand the efficiency of compensation policies in promoting financial market equilibrium and corporate governance..

[Audio] Our presentation will focus on the role of compensation in corporate governance particularly in relation to executive compensation and takeovers. This subject has been extensively studied by various scholars and authors including Aghion Kaplan and Bolton. Our main focus is to understand how compensation policies promote financial market balance and corporate governance. Throughout the presentation we will refer to important articles that shed light on this topic. One such article is "Runaway C-E-O Pay: What's Happening and What You Can Do About It" by the American Federation of Labor and Industrial Organizations which addresses the issue of excessive C-E-O compensation and offers potential solutions. We will also discuss "Asset Pricing and the Bid-Ask Spread" by Amihud and Mendelson which examines the impact of bid-ask spreads on stock prices. Additionally "New Evidence and Perspectives on Mergers" by Andrade Mitchell and Stafford provides new insights into mergers. "The Japanese Main Bank System: An Introductory Overview" by Aoki Patrick and Sheard offers a comprehensive understanding of the Japanese firm and its governance structure. These articles along with others mentioned in the presentation cover various topics such as the role of boards as advisors and monitors the influence of legal restrictions on private contracts and the idea of large shareholder activism. We encourage you to read these articles to gain a deeper understanding of the complex relationship between compensation and corporate governance. As we continue with our presentation keep in mind the importance of comprehending the effectiveness of compensation policies and their impact on financial market balance..

[Audio] In this slide we will discuss the role of compensation in corporate governance. We will examine various scholarly articles and research papers that have explored this topic. These papers cover a range of topics including the dual role of boards as advisors and monitors the impact of legal restrictions on private contracts and the concept of large shareholder activism. The authors of these papers have provided valuable insights into understanding the efficiency of compensation policies in promoting financial market equilibrium and corporate governance. Their research has shed light on the relationship between executive compensation and takeovers. We have examined Relational Investing and Agency Theory by Ayres and Crampton Corporate Directorship Practices by Bacon and Brown and Successful Takeovers without Exclusion by Bagnoli and Lipman. Additionally we have looked at Securities Class Action Settlements by Bajaj Mazumdar and Sarin CEO Incentives and Firm Size by Baker and Hall and Compensation and Incentives: Practice against Theory by Baker Jensen and Murphy. These works have helped us better understand the practical and theoretical aspects of executive compensation. We have also examined The Control of Corporate Europe edited by Barca and Becht Tender Offers and Management Resistance by Baron Venture Capital: Law Business Strategies and Investment Planning by Bartlett and Shareholder Representation and Proxy Voting in the European Union by Baums. These articles and research papers provide us with a comprehensive understanding of the role of compensation in corporate governance. They have helped shape our knowledge on how compensation policies can contribute to financial market equilibrium and effective corporate governance..

[Audio] In this section we will be discussing various scholarly articles and research papers on the role of compensation in corporate governance specifically the relationship between executive compensation and takeovers. These articles cover topics such as the dual role of boards legal restrictions on contracts shareholder activism and the use of contracts as barriers to entry. Renowned authors such as Aghion Kaplan and Bolton have contributed to these articles. The overall focus is to understand the effectiveness of compensation policies in promoting financial market equilibrium and corporate governance. We will be referencing articles such as Baums and Fraune's "Institutionelle Anleger und Publikumsgesellschaft" and Bebchuk's "Federalism and the Corporation." Other articles we will discuss include Bebchuk and Ferrell's "A Rent-Protection Theory of Corporate Ownership and Control" and "Federalism and Corporate Law: The Race to Protect Managers from Takeovers " as well as Bebchuk and Roe's "A Theory of Path Dependence in Corporate Ownership and Governance" and Bebchuk Coates and Subramanian's "The Powerful Antitakeover Force of Staggered Boards." These articles offer valuable insights into the impact of executive compensation on corporate governance. Through this presentation we will gain a deeper understanding of different perspectives and theories on compensation policies in corporate governance..

[Audio] We will discuss scholarly articles and research papers on compensation in corporate governance specifically the relationship between executive compensation and takeovers. We will cover topics such as the dual role of boards as advisers and monitors the impact of legal restrictions on private contracts large shareholder activism and the role of contracts as a barrier to entry. Our studies focus on the efficiency of compensation policies in promoting financial market equilibrium and effective corporate governance. We will examine notable articles such as Becht's work on European corporate governance and the balance between control and liquidity and Benelli Loderer and Lys' study on labor participation in corporate decision-making in West Germany. Additionally we will examine Berger and Ofek's examination of the effects of diversification on firm value and Berglof's dissertation on corporate control and capital structure. Through these discussions we aim to gain a deeper understanding of the complexities and dynamics of compensation in corporate governance..

[Audio] The efficiency of compensation policies in promoting financial market equilibrium and corporate governance is crucial in higher education. This presentation covers various topics related to this subject including the dual role of boards as advisors and monitors the impact of legal restrictions on private contracts the concept of large shareholder activism and the role of contracts as a barrier to entry. The authors of these papers include Aghion Kaplan and Bolton among others. One of the key articles discussed in this presentation is The Optimality of the Mandatory Bid Rule by Bergstrom Clas Peter Hogfeldt and Johan Molin. This article examines the efficiency of the mandatory bid rule in takeovers which requires the highest bidder to offer a price equal to or greater than the highest bid offered by any other bidder. The authors find that this rule can have a positive impact on the efficiency of takeovers but it can also lead to conflicts of interest between shareholders and management. Another important article is The Design of Internal Control and Capital Structure by Berkovitch Elazar and Ronen Israel. This article examines the relationship between internal control and capital structure and how these factors can impact the efficiency of a firm's operations. The authors find that firms with stronger internal controls and lower levels of debt tend to perform better in the long run. Finally the article Executive Compensation and Incentives: The Impact of Takeover Legislation by Bertrand Mullainathan and others explores the relationship between executive compensation and takeovers. The authors find that takeover legislation can have a significant impact on the incentives of C-E-O-s but it can also lead to unintended consequences. In conclusion the articles presented provide valuable insights into the role of compensation in corporate governance and the impact of legal and regulatory frameworks on financial market efficiency. Businesses can use this information to make informed decisions about their compensation policies and governance structures ultimately improving their long-term performance..

[Audio] In this discussion we will be focusing on the article "Corporate Voting and the Proxy Process: Managerial Control versus Shareholder Oversight" by Jennifer E Bethel and Stuart Gillan. This piece published in the Journal of Financial Economics in 2000 explores the relationship between corporate voting and the proxy process and how managerial control affects it. The authors also delve into the dual nature of boards as both advisors and monitors of management as well as the impact of legal constraints on private contracts. The concept of large shareholder activism and the role of contracts as a barrier to entry are also discussed. Ultimately the authors argue that compensation policies should be formulated in a way that aligns the interests of management with those of shareholders and encourages shareholder oversight..

[Audio] Our discussion today focuses on the role of compensation in corporate governance. Specifically we will be analyzing the connection between executive compensation and takeovers and reviewing various scholarly articles and research papers on the subject. These articles cover a wide range of important topics such as the dual role of boards as advisors and monitors the influence of legal restrictions on private contracts and the concept of large shareholder activism. We will also be exploring the use of contracts as a means of maintaining financial market equilibrium and promoting strong corporate governance. Among the authors of these papers are Aghion Kaplan and Bolton among others. Their work provides valuable insights into the effectiveness of compensation policies and the factors that shape them. In particular we will be referring to the work of renowned professor and expert in corporate law and economics Bernard Black. Some of his notable publications include 'Agents Watching Agents' 'Shareholder Activism and Corporate Governance' and 'The Core Institutions that Support Strong Securities Markets'. As we continue our discussion we will also be examining the necessary legal and institutional requirements for robust securities markets and the self-enforcing model of corporate law introduced by Black and his colleagues. Additionally we will be considering the case of Russian privatization and corporate governance and the impact of insider influences on this process. Research conducted by Black Reinier Kraakman and Anna Tarassova offers valuable insights into the complexities of corporate governance in different regions. Overall our goal is to gain a thorough understanding of the crucial role of compensation policies in promoting effective corporate governance and sustaining financial market equilibrium..

[Audio] Welcome class. We are currently on slide number 9 of our presentation on the role of compensation in corporate governance. In this section we will be discussing numerous scholarly articles and research papers that analyze the connection between executive compensation and takeovers. These articles cover various topics including the dual role of boards the effects of legal restrictions on contracts and large shareholder activism. Some notable authors whose work we will be discussing are Aghion Kaplan and Bolton among others. The overall theme of these papers is to understand how compensation policies contribute to achieving financial market equilibrium and effective corporate governance. One particular article we will be looking at is by Bolton and Scharfstein which investigates the optimal debt structure and the number of creditors in a company. Another paper by Bolton and von Thadden explores the dynamic relationship between liquidity and corporate control. We will also examine the role of equity bonds and bank debt in capital structure and financial market equilibrium as outlined by Bolton and Freixas. Additionally we will discuss the concept of relationship banking and its impact on corporate governance as studied by Boot. We will also cover the effects of C-E-O contracting and anti-takeover amendments as examined by Borokhovich Brunarski and Parrino. Our presentation will also touch upon the efficient monitoring role of proxy contests as analyzed by Borstadt and Zwirlein. Lastly we will review Bower's work on the impact of mergers and acquisitions on executive compensation. These articles and research papers offer valuable insights into the effectiveness of compensation policies in promoting financial market equilibrium and effective corporate governance. Thank you for joining me for slide number 9 and I look forward to discussing more with you in our next slide..

[Audio] In this section of our presentation we will discuss various scholarly articles and research papers on executive compensation in corporate governance specifically in relation to takeovers. These articles cover a wide range of topics including the dual role of boards the impact of legal restrictions large shareholder activism and the role of contracts. Some notable authors of these papers include Aghion Kaplan and Bolton. Our main objective is to gain a deeper understanding of how compensation policies can promote financial market equilibrium and effective corporate governance. Two noteworthy articles are Brickley Linck and Coles' examination of post-retirement outcomes for C-E-Os and their incentives and Bulow Huang and Klemperer's discussion on the effects of "toeholds" on takeovers. We also have studies by L R Burgess and M Burkart on top executive pay packages and takeover regulation respectively. Burkart Gromb and Panunzi have also published multiple papers on the impact of large shareholders and the value of the firm. Byrd and Hickman's study on outside directors' monitoring of managers and Ca's article on the effects of hostile takeovers on executive compensation are valuable contributions to this topic. Through these articles we seek to gain a comprehensive understanding of the effectiveness of compensation policies in promoting financial market equilibrium and effective corporate governance. This concludes the 10th slide of our presentation..

[Audio] This slide discusses the role of compensation in corporate governance specifically the relationship between executive compensation and takeovers. It references scholarly articles by experts like Aghion Kaplan and Bolton covering topics such as the dual role of boards the impact of legal restrictions on contracts large shareholder activism and the use of contracts as entry barriers. The focus is on understanding the efficiency of compensation policies in promoting financial equilibrium and governance. One article mentioned is the Cardon Report from 1998 which studied governance in Belgium and the Brussels Stock Exchange and influenced the Dual Code of the Brussels Stock Exchange and Belgian Banking & Finance Commission. Other relevant studies include Carleton Nelson and Weisbach's research on institutional influence through private negotiations Carlin and Mayer's work on finance and investment and Carosso's analysis of the Wall Street Money Trust. Additionally Carver's book and Cary's article provide insight on federalism and corporate law. These articles help us understand the complexities of compensation in corporate governance and its effects on financial equilibrium. Further details will be explored as we continue with our presentation..

[Audio] In this lesson we will discuss the role of compensation in corporate governance and its relationship with takeovers. This topic has been extensively researched and written about by scholars such as Aghion Kaplan and Bolton. Our focus will be on understanding the effectiveness of compensation policies in promoting financial market equilibrium and corporate governance. The articles we will cover address a range of topics including the dual role of boards the impact of legal restrictions large shareholder activism and the use of contracts as a barrier to entry. Each of these aspects is crucial in understanding the dynamics of executive compensation and its impact on corporate governance. We will also examine various research papers such as Brian R Cheffins' study on the emergence of the Berle-Means Corporation in the UK and Gilles Chemla's paper on hold-up industrial relations and takeover threats. We will also gain historical perspective from Ron Chernow's book "The House of Morgan." Furthermore we will explore the concept of relationship investing where large shareholders play a vital role in monitoring managers as explained by Chidambaran and John. We will also analyze the empirical analysis of ownership structure and investment by Myeong-Hyeon Cho. In our discussion we cannot overlook the impact of legal reforms such as the 1992 S-E-C Proxy Reforms as highlighted by S Choi's study. We will also look at the value of a vote in emerging markets as studied by Kee H Chung and Jeong-Kuk Kim. Lastly we will touch upon the separation of ownership and control in East Asian corporations as discussed by Stijn Claessens Simeon Djankov and Larry H P Lang. Through this lesson we aim to understand the various factors that contribute to the effectiveness of compensation policies in promoting financial market equilibrium and corporate governance. Thank you for joining me for this discussion on slide number 12..

[Audio] Our exploration of the relationship between executive compensation and takeovers has led us to discover numerous scholarly articles and research papers discussing the role of compensation in corporate governance. These articles cover essential topics like the dual role of boards legal restrictions on contracts shareholder activism and the use of contracts as a barrier to entry. Authors such as Aghion Kaplan and Bolton as well as others aim to increase our understanding of how compensation policies impact financial market equilibrium and corporate governance. One of these works is "Convergence and its Critics: What Are the Preconditions to the Separation of Ownership and Control?" by John C Coffee published in 2000 by Columbia Law School. This paper delves into the complex issue of separation of ownership and control in corporate governance. Another important paper is "The Importance of Relationships to the Availability of Credit" by R A Cole published in the Journal of Banking and Finance in 1998 which highlights the significance of relationships in credit availability for corporations. Additionally "Poison or Placebo? Evidence on the Deterrence and Wealth Effects of Modern Antitakeover Measures" by Robert Comment and G William Schwert published in the Journal of Financial Economics in 1995 examines the effectiveness of modern antitakeover measures. In 1992 the Cadbury Committee released the "Cadbury Report " discussing the financial aspects of corporate governance followed by the "Cadbury Code" a code of best practice in the same year. Lastly the Commonwealth Association published "Corporate Governance Codes and Principles in the Commonwealth" in 1999 providing principles of best business practices for the Commonwealth. As we conclude these articles have shed light on the role of compensation in corporate governance and its impact on financial market equilibrium..

[Audio] In this section we will be discussing the relationship between executive compensation and takeovers as explored in various scholarly articles and research papers. These articles cover a range of topics including the role of boards in advising and monitoring the impact of legal restrictions on private contracts and the concept of large shareholder activism. Some of the authors whose work we will be looking at include Aghion Kaplan Bolton and others. The overall focus of these papers is to understand the efficiency of compensation policies in promoting financial market equilibrium and corporate governance. Moving on to specific articles we have Cosh and Hughes' 1989 paper on ownership management incentives and company performance in the UK which provides an empirical analysis from 1968 to 1980. Cotter Shivdasani and Zenner's 1997 study examines the role of independent directors in enhancing target shareholder wealth during tender offers. Another interesting paper is Cubbin and Leech's 1983 investigation into the effect of shareholding dispersion on control in British companies. We will also be looking at Da Rin and Hellmann's 2001 paper on banks as catalysts for industrialization which explores the impact of banking on industrial development. Daily and others's 1998 study looks at the composition of compensation committees and how it affects C-E-O compensation. Danielson and Karpoff's 1998 paper examines the uses of corporate governance provisions. Lastly we have David and Brierley's 1985 book "Major Legal Systems in the World Today " which provides an introduction to the comparative study of law. These are just some of the many articles and papers that shed light on the complex relationship between compensation and corporate governance. Through these studies we hope to gain a better understanding of how compensation policies can impact financial market equilibrium and corporate governance. Please feel free to ask any questions regarding this topic..

[Audio] We have reached slide number 15 of our presentation. This slide delves into the role of compensation in corporate governance. The text cites various scholarly articles and research papers on the topic including those by Aghion Kaplan and Bolton. These articles explore important factors such as the dual role of boards legal restrictions and large shareholder activism. Some key references mentioned include De Long and Peter Temin's book "Inside the business enterprise " which offers historical perspectives on information usage and the works of DeAngelo and Debreu on proxy contests and ownership in publicly held corporations. Additionally the impact of executive stock option plans as discussed by DeFusco Johnson and Zorn cannot be ignored. Demsetz and Lehn's research on corporate ownership structure is also worth noting. These articles provide valuable insights on the efficiency of compensation policies in corporate governance. As educators it is crucial for us to keep updated on such research to equip our students with relevant and accurate information. That concludes our discussion for this slide. Let's move on to the next one..

[Audio] We will now review various scholarly articles and research papers that examine the role of compensation in corporate governance particularly in relation to takeovers. These articles cover a range of topics including the dual role of boards as advisers and monitors the impact of legal restrictions on private contracts and the concept of large shareholder activism. Some notable authors of these papers include Aghion Kaplan and Bolton among others. One important article we will focus on is "A Theory of Debt and Equity: Diversity of Securities and Manager-Shareholder Congruence" by Dewatripont and Tirole published in the Quarterly Journal of Economics in 1994. This article explores the connection between debt and equity and how it influences the alignment of interests between managers and shareholders. Additionally we will also discuss Dewatripont and Tirole's 1996 article "The Prudential Regulation of Banks " which looks at the regulation of banks and its impact on their behavior. Another significant study is Douglas Diamond's 1984 article "Financial Intermediation and Delegated Monitoring " which delves into the role of financial intermediaries in monitoring and controlling risk. Diamond's other works such as "Reputation Acquisition in Debt Markets" and "Monitoring and Reputation: The Choice between Bank Loans and Directly Placed Debt " further explore the importance of reputation in debt markets. We will also touch upon Diamond's collaboration with Raghuram Rajan in their 2000 article "A Theory of Bank Capital " which examines the optimal level of bank capital and its effects on risk-taking behavior. Lastly we will briefly mention M Dodd's 1932 article "For Whom are Corporate Managers Trustees?" which poses a crucial question in the discussion of corporate governance. These articles and research papers aim to provide a deeper understanding of how compensation policies contribute to promoting financial market equilibrium and efficient corporate governance..

[Audio] In this section of our presentation we will be discussing the role of compensation in corporate governance. Specifically we will be focusing on the relationship between executive compensation and takeovers as discussed in various scholarly articles and research papers. These articles cover a range of topics including the dual role of boards as advisers and monitors the impact of legal restrictions on private contracts the concept of large shareholder activism and the role of contracts as a barrier to entry. Some of the authors of these papers include Aghion Kaplan and Bolton among others. Their research focuses on understanding the efficiency of compensation policies in promoting financial market equilibrium and corporate governance. This is an important topic in today's business landscape and it is crucial for us to understand the different perspectives and findings presented by these scholars. Some notable papers we will be discussing include "The Proper Role of Target's Management in Responding to a Tender Offer" by Easterbrook and Fischel "International Corporate Differences: Market or Law?" by Easterbrook and "The economic structure of corporate law" by Easterbrook and Fischel. We will also be looking at "The Growth of Institutional Stock Ownership: A Promise Unfulfilled" by Edwards and Hubbard "Banks Finance and Investment in Germany" by Edwards and Fischer and "Universal Banks and German Industrialization: A Reappraisal" by Edwards and Ogilvie. Other important works include "The Meaning of Modern Business" by Eells "The Structure of the Corporation" by Eisenberg and "Is Relationship Lending Special? Evidence from Credit File Data in Germany" by Elsas and Pieter. Understanding the research and findings presented in these articles can help us gain a better understanding of the complexities of compensation in corporate governance and its impact on financial market equilibrium..

[Audio] In this presentation we will be discussing the relationship between executive compensation and takeovers in corporate governance. Our discussions will be based on various scholarly articles and research papers including those by authors such as Aghion Kaplan Bolton and others. These articles delve into the dual role of boards as advisers and monitors the impact of legal restrictions on private contracts the concept of large shareholder activism and the role of contracts as a barrier to entry. These factors greatly influence the effectiveness of compensation policies in promoting financial market equilibrium and ensuring effective corporate governance. Some notable works that we will be discussing are "The Ultimate Ownership of Western European Corporations" by Faccio and Lang (2002) "Private Incentives and Public Trading" by Faure-Grimaud and Gromb (1999) and "Why Do CEO's Reciprocally Sit on Each Other's Board?" by Fich and White (2001). We will also be exploring other interesting articles such as "The Role of Liability Rules and the Derivative Suit in Corporate Law" by Fishel and Bradley (1986) "A Theory of Preemptive Takeover Bidding" by Fishman (1988) and "Economic Effects of Codetermination" by FitzRoy and Kraft (1993). Additionally we will be discussing the works of P Sargant Florence including "The Statistical Analysis of Joint Stock Company Control" (1947) "The Logic of British and American Industry" (1953) and "Ownership Control and Success of Large Companies" (1961). These articles offer valuable insights and analysis on efficient compensation policies that contribute to a balanced financial market and effective corporate governance. It is imperative for us to understand these concepts in order to make informed decisions and recommendations. Thank you for your attention and I am eagerly anticipating a fruitful discussion on this topic..

[Audio] Thank you for joining us for this presentation on the role of compensation in corporate governance. In this final slide we would like to highlight some key takeaways from our research. Our study stresses the importance of understanding the role of contracts in corporate governance. We found that contracts can act as a barrier to entry hindering new firms from entering a market. Furthermore contracts can be used to motivate managers to prioritize the interests of their shareholders. We also discovered that legal limitations on private contracts can greatly influence corporate governance. In certain countries private contracts are heavily regulated making it difficult for firms to negotiate with one another. This can lead to inefficient decision-making and a lack of innovation. Lastly our research emphasizes the significance of shareholder activism in promoting corporate governance. We observed that large shareholders can play a crucial role in holding managers accountable and ensuring that firms operate in the best interests of their shareholders. Overall our findings suggest that compensation policies are a crucial tool in promoting financial market equilibrium and corporate governance. By motivating managers to prioritize the interests of their shareholders and promoting efficient decision-making compensation policies can ensure that firms operate in a manner that benefits all stakeholders. Thank you for your attention and we hope that you found this presentation informative..