T here are two sources of agency costs under moral hazard: (1) distortions in incentive contracts and (2) implementation of suboptimal decisions. In the accounting literature, the relation between conservative accounting and agency costs of type (1) has received considerable attention (cf. Watts 2002). However, little appears to be known about the effects of accounting conservatism on agency costs of type (2) or trade-offs between agency costs of types (1) and (2). The purpose of this study is to examine this void. In a principal-agent setting in which the principal motivates the agent to expend effort using accounting earnings, this study shows that accounting earnings become more useful for reducing agency costs of type (2) when measured conservatively than when measured aggressively. Combined with the result in Kwon et al. (2001) that agency costs of type (1) decrease with accounting conservatism, this analysis suggests that conservative accounting enhances the incentive value of accounting signals with respect to both types of agency costs.
In 1993, Congress passed § 162(m) of the Internal Revenue Code. Section 162(m) disallows a deduction for compensation in excess of $1,000,000 paid to the chief executive officer (CEO) and the four highest compensated officers other than the CEO of a publicly traded corporation unless the excess is “performance-based.” Several articles in the popular and professional press (The New York Times 1993; The Journal of Taxation 1994) predicted that executives whose nonperformance-based compensation exceeded $1,000,000 before the passage of the legislation would find their salaries reduced and their performance-based compensation increased as a result of the legislation. Other predictions regarding the impact of § 162(m) have been mixed, with some commentators predicting no real effect (Burzawa 1993). While several empirical studies have examined firm reactions to § 162(m) in terms of compensation packaging, no prior research has considered the impact of this legislation on executive performance. This paper provides a theoretical examination of both firm and executive responses to the deductibility limit imposed by § 162(m). The results of this study may be useful to tax policymakers considering the effectiveness of § 162(m) in meeting Congressional objectives, and to empirical researchers examining the impact of this legislation on firm and executive performance.
Current hardware and application storage trends put immense pressure on the operating system's storage subsystem. On the hardware side, the market for storage devices has diversified to a multi-layer storage topology spanning multiple orders of magnitude in cost and performance. Above the file system, applications increasingly need to process small, random IO on vast data sets with low latency, high throughput, and simple crash consistency. File systems designed for a single storage layer cannot support all of these demands together. We present Strata, a cross-media file system that leverages the strengths of one storage media to compensate for weaknesses of another. In doing so, Strata provides performance, capacity, and a simple, synchronous IO model all at once, while having a simpler design than that of file systems constrained by a single storage device. At its heart, Strata uses a log-structured approach with a novel split of responsibilities among user mode, kernel, and storage layers that separates the concerns of scalable, high-performance persistence from storage layer management. We quantify the performance benefits of Strata using a 3-layer storage hierarchy of emulated NVM, a flash-based SSD, and a high-density HDD. Strata has 20-30% better latency and throughput, across several unmodified applications, compared to file systems purpose-built for each layer, while providing synchronous and unified access to the entire storage hierarchy. Finally, Strata achieves up to 2.8× better throughput than a block-based 2-layer cache provided by Linux's logical volume manager. CCS CONCEPTS • Information systems → Hierarchical storage management; Storage class memory; • Software and its engineering → File systems management;
Performance-asymmetric multi-cores consist of heterogeneous cores, which support the same ISA, but have different computing capabilities. To maximize the throughput of asymmetric multi-core systems, operating systems are responsible for scheduling threads to different types of cores. However, system virtualization poses a challenge for such asymmetric multi-cores, since virtualization hides the physical heterogeneity from guest operating systems. In this paper, we explore the design space of hypervisor schedulers for asymmetric multi-cores, which do not require asymmetry-awareness from guest operating systems. The proposed scheduler characterizes the efficiency of each virtual core, and map the virtual core to the most area-efficient physical core. In addition to the overall system throughput, we consider two important aspects of virtualizing asymmetric multi-cores: performance fairness among virtual machines and performance scalability for changing availability of fast and slow cores.We have implemented an asymmetry-aware scheduler in the open-source Xen hypervisor. Using applications with various characteristics, we evaluate how effectively the proposed scheduler can improve system throughput without asymmetry-aware operating systems. The modified scheduler improves the performance of the Xen credit scheduler by as much as 40% on a 12-core system with four fast and eight slow cores. The results show that even the VMs scheduled to slow cores have relatively low performance degradations, and the scheduler provides scalable performance with increasing fast core counts.
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