Christian Kuiate and Thomas R. Noland
This paper aims to investigate whether firms strategically use retirement plans to retain employees with core competencies and whether offering these retirement plans provides…
Abstract
Purpose
This paper aims to investigate whether firms strategically use retirement plans to retain employees with core competencies and whether offering these retirement plans provides competitive advantages that lead to greater profitability.
Design/methodology/approach
The data set consists of annual financial data reported to the US Department of Transportation by long haul truckload carriers. The paper uses linear regression analysis to test the hypotheses. Descriptive statistics, univariate comparisons and robustness tests are also reported.
Findings
The findings support the assertion that offering a retirement plan is positively related to the attraction and retention of skilled workers and that firms that offer retirement plans are more profitable.
Research limitations/implications
Data limitations preclude proving a definitive causal relationship. With the increasing availability of rich and timely data sets at both the firm and employee levels, future research may enhance the understanding of the role that pensions play in both labor and firm productivity.
Originality/value
This study provides evidence that retirement plans may serve as a strategic tool in highly competitive industries characterized by high labor turnover. This study shows that by analyzing the degree of cost stickiness in income statement line-items, it is possible to bypass the need for more granular analyses to uncover meaningful economic relationships. Finally, this study contributes to the literature examining the implications of operating decisions for financial performance (a balanced scorecard perspective), and it shows that offering pension benefits is related to stronger financial performance.
Details
Keywords
Emrah Ekici and Marina Y. Ruseva
The authors examine the role of stock liquidity in CEO equity compensation design. For a sample of publicly traded firms from 2007 to 2020, the authors find that greater stock…
Abstract
The authors examine the role of stock liquidity in CEO equity compensation design. For a sample of publicly traded firms from 2007 to 2020, the authors find that greater stock liquidity is associated with a higher proportion of stock awards relative to the proportion of options in CEO equity compensation. The results of this study suggest that stock price informativeness on the grant date has a differential effect on the preference for the type of equity compensation awarded to CEOs. The empirical results are supported by multivariate analyses using alternative measures of stock liquidity and a two-stage least squares (2SLS) specification that alleviates endogeneity concerns. Furthermore, the authors document that the firm-specific increase in the proportion of stock awards compared to the proportion of stock options is associated with a firm-specific increase in stock liquidity. Collectively, the analyses suggest that stock liquidity as a measure of stock price informativeness contributes to the choice of CEO equity compensation design.