No abstract

Relying on macro theories (agency and organizational control) as well as micro theories (goal setting and expectancy), this study investigates the impact of profit-sharing plan (PSP) adoption on the value creation process of financial services firms. The study relies on a comprehensive methodological approach that is both quantitative, with a dual cross-sectional/longitudinal (pre-post) design that compares PSP adopters with a control group of PSP non-adopter firms, and qualitative through interviews with some adopting firms' managing directors. Results show that firms adopting a PSP enhance their profitability in comparison to both their own prior performance and to firms that are not adopting a PSP. Results also show that the adoption of a PSP: (a) positively influences only profit drivers that are under employee control; and (b) is more likely to have a long term, positive impact on external profit drivers than on internal profit drivers. Qualitative data from field interviews corroborate and enrich these quantitative findings.

This study examines the links between personality and the relative attraction of various total rewards components. A survey approach is adopted, with 967 individuals completing a questionnaire. These individuals are currently employed. Results show that, after controlling for the effects of several demographic variables, “Big-Five” personality traits do affect individuals’ attraction to the following total rewards components: quality of work and of social relationships, development and career opportunities, variable pay, indirect pay, flexibility of working conditions, and prestige. Among Big-Five personality traits, openness to experience best predicts the relative importance employees give to the various total rewards components.

This article provides a synthesis of academic research on director compensation, the ultimate purpose being the identifi cation of practices that are measurably linked with value creation. From a methodological perspective, mapping director compensation into fi rm performance is extremely diffi cult as there are many other aspects of governance and management that ultimately affect fi rm performance. The article focuses on specifi c components or aspects of director compensation. What is deemed to be the ' Best ' practice in director compensation evolves over time. In parallel, the popularity of stock options as a compensation strategy for corporate directors has waned, with full-value equity unit grants (typically with vesting and ownership conditions) emerging as the preferred approach. Similarly, while earlier fi ndings show stock option grants as a director compensation tool to be value enhancing, more recent fi ndings revisit the issue and mostly support the use of full-value unit equity-based compensation. Overall, it appears that equity-based compensation for directors translates into value creation by enhancing directors ' monitoring focus. However, its effectiveness is conditional upon a fi rm ' s context, with greater improvements in performance being observed when fi rms start from a weak governance base. Moreover, there are several ethical dimensions, which must be addressed in the elaboration of any Correspondence: M. Magnan Professor and Lawrence Bloomberg Chair in Accountancy, John Director compensation must be high enough to attract high-caliber individuals and toreward them for their responsibilities, but not so high as to potentially impair their objectivity, judgment and independence. 2. Director compensation must be set in a transparent and objective way, with clear benchmarks that refl ect the most plausible talent markets. 3. A signifi cant proportion of director compensation must be ' locked in ' for the long term (5 -10 years). 4. Director compensation must not be based upon the attainment of short-term objectives or goals, but rather based on the long-term success of the organisation predominantly while not encouraging excessive risk taking.