Case Studies of Executive Compensation in Agricultural Cooperatives

Trechter, David; King, Robert P.; Cobia, David W.; Hartell, Jason G.

doi:10.2307/1349756

Cited by 16 publications

(7 citation statements)

References 3 publications

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“…Fourth, cooperatives lack external mechanisms for disciplining the management (Staatz, 1987;Trechter et al, 1997). Unlike stock-listed companies that are scrutinised by the financial media (on behalf of current and potential shareholders), there is no external financial assessment of the performance of the cooperative (and therefore of its management).…”

Section: Corporate Governance In Cooperativesmentioning

confidence: 99%

Accommodating Two Worlds in One Organisation: Changing Board Models in Agricultural Cooperatives

2012

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While most economic organisation literature on cooperatives has focused on changes in income rights, we study changes in the allocation of decision rights between board of directors (representing members) and managers. The traditional role of the board is to direct the activities of the managers. However, professional management increasingly makes most strategic decisions, pushing the board into a supervisory role. We present two groups of findings on changing board-management relationships. We identify three corporate governance models: traditional, management and corporation. And we present an empirical illustration showing a relationship between the choice of board model, and product portfolio and performance.

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Section: Corporate Governance In Cooperativesmentioning

confidence: 99%

Accommodating Two Worlds in One Organisation: Changing Board Models in Agricultural Cooperatives

2012

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“…It is believed that the level of monitoring would be set according to the incentives gap between the principal and the agent (Beatty and Zajac, 1994). On the contrary, Trechter et al (1998), argued that the agency problem in a co-operative is not solved by incentive schemes but with continual oversight by all members.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In the 2010 consultation paper on co-operative societies, it was emphasized that the existing legal prohibition of most CoM members from receiving a fixed salary was discriminatory and this was also the position taken by the main Maltese co-operative association, Koperattivi Malta (KM, 2010). Trechter et al (1998) studied managerial compensations in two US states-Minnesota and Wisconsin. They found out that although it included an element of performance-related bonuses, most executive pay in co-operatives consisted of fixed salaries which were normally set at a level positively related to cooperative size in terms of sales volume, total assets and number of members and employees.…”

Section: Incentive Schemesmentioning

confidence: 99%

“…Baldacchino and Bugeja ( 2014) stated those in charge of governance in Maltese co-operatives may themselves need to be trained in order to be able to appreciate and introduce such schemes that may help minimise conflict of interest. A study by Hviid (2006) analyzed performance-related pay within Danish co-operatives, and two further studies by Trechter and King (1995) and Trechter et al (1998) identified executive compensation patterns as well as researched executive compensation in agricultural co-operatives in two states in the U.S.A. However, to the knowledge of the authors, beyond these main studies, a research gap generally persists relating to such links.…”

Section: Introductionmentioning

confidence: 99%

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Assessing Incentive and Monitoring Schemes in the Corporate Governance of Maltese Co-operatives

Peter¹,

Camilleri²,

Grima³

et al. 2017

ERSJ

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The objectives of this study were to ascertain and assess the major incentive and monitoring schemes currently being applied in Maltese co-operatives as well as those types of schemes that may be applicable. Semi-structured interviews were conducted with ten committees of management members, ten professional managers and seven co-operative consultants.The study reveals a lack of application of both incentive and monitoring schemes in these entities. An over-emphasis on cost effectiveness is resulting not only in the current little application of such schemes, but also in obstacles towards the application of new ones in the future. Furthermore, any application of monitoring schemes in particular is perceived as having negative implications on the level of trust between the monitor and the monitored.Additionally, few incentives are being applied to promote co-operative principles despite the declared management willingness to do so. The study points out that a number of lacunas need to be overcome for the realization of both types of schemes. Co-operative managers need to become more aware of the objectives of their co-operative and also more determined towards promoting the co-operative principles.The paper also concludes that no trust implications need to arise in the implementation of any type of scheme as long these are well designed, explained and implemented. One recommended way towards promoting monitoring schemes is the introduction of an updated Co-operative Societies Act including new obligations on the internal control environment.

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“…Trechter and King (1995) discover that bonuses of Coop managers were mainly related to size measures like sales or total assets and less dependent on profitability. Trechter et al (1997) report that Coop boards are skeptical of ex ante bonus programs. The empirical findings for CEO compensation in Coops are in line with the findings for other non-profit organizations, see e.g.…”

Section: Introductionmentioning

confidence: 99%

Optimal Compensation Structure in Consumer Cooperatives Under Mixed Oligopoly

Kopel

Marini

2012

SSRN Journal

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Abstract. The main aim of this paper is to derive properties of an optimal compensation scheme for consumer cooperatives (Coops) in situations of strategic interaction with profitmaximizing firms (PMFs). Our model provides a reason why Coops are less prone than PMFs to pay variable bonuses to their managers. We show that this occurs under price competition when in equilibrium the Coop prefers to pay a straight salary to its manager whereas the profit-maximizing rival adopts a variable, high-powered incentive scheme. The main rationale is that, due to consumers' preferences, a Coop is per se highly expansionary in term of output and, therefore, does not need to provide strong strategic incentives to their managers to expand output aggressively by undercutting its rival.

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Case Studies of Executive Compensation in Agricultural Cooperatives

Cited by 16 publications

References 3 publications

Accommodating Two Worlds in One Organisation: Changing Board Models in Agricultural Cooperatives

Accommodating Two Worlds in One Organisation: Changing Board Models in Agricultural Cooperatives

Assessing Incentive and Monitoring Schemes in the Corporate Governance of Maltese Co-operatives

Optimal Compensation Structure in Consumer Cooperatives Under Mixed Oligopoly

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