By: Michael Cohen September 13, 2016
By: Nicolaas Kruger May 16, 2016
Effects of race on CEO pay-performance sensitivities
By Sean Barrett
Source: http://repository.up.ac.za/handle/2263/43964 November 10, 2015
Orientation: The available literature has revealed a polarised picture regarding the effects of race on CEO remuneration. This division centres on whether race is a beneficial factor or not with regard to the level and sensitivity of remuneration received. Introducing South Africa’s affirmative labour policies and the growing societal calls to better explain executive remuneration creates the unique opportunity to examine the effects of race on CEO pay.
Research purpose: The purpose of the research centred on two important themes. Firstly the research sought to investigate the effects of race on the sensitivity of executive pay to corporate performance. Secondly the effects of race on the level and structure of executive pay was probed.
Motivation for the study: The primary motivation of the study centred on determining whether race is has an affect, if any, on the remuneration paid to CEOs in South Africa. This will assist in understanding whether the affirmative polices implemented in South Africa have made any impact in the top level of executive remuneration.
Research design: The study was designed to be quantitative, descriptive and longitudinal in nature utilising valid secondary data sources. The BFA Macgregor online financial database was selected as the most appropriate source of both corporate performance information and directors’ remuneration. Nineteen black CEOs were identified along with a random sample of 45 white CEOs. Following the data been analysed for reliability and validity it was then subject to primary and secondary statistical tests to determine significance and correlation strength. Main findings/results: All components of South African CEO remuneration studied were found to strongly correlate to PAT and EBITDA and to a lesser degree ROE and HEPS. ROE and HEPS have shown correlation strength growth in recent years. This collection of measures reflects a balanced basket of accounting-‐based and non-‐ accounting based measures. Black and white CEO mean remuneration when compared was found to have no significant difference due to race. A notable difference found was the higher degree of pay-‐performance sensitivity and variability seen within the black CEO sample. Practical/Managerial implications: King III compels boards and remuneration committees to ensure remuneration of directors is fair and reasonable, sensitive to performance and aligned with the strategy of the organisation. Ensuring realistic pay-‐ performance sensitivities are not just a corporate governance requirement but also help alleviate principle-‐agent issues while correctly incentivising the CEO. Boards looking to appoint black or minority CEOs should continue to remunerate in a equitable and fair manner and be aware of such mental biases such as the “inverse Matthew effect” and other social out-‐group biases especially when evaluating performance. Contribution: The study showed that race doesn’t affect the level of CEO remuneration but does impact on the pay-‐performance sensitivity and the variability. The difference in sensitivity and variability could indicate the presence of mental biases such as the “inverse Matthew effect” and other social out-‐group biases when evaluating performance.
Optimal media schedules in emerging markets: A South African perspective establishing the inherent characteristics that influence return on investment for advertising spend.
By Amy Beck
Source: http://repository.up.ac.za/handle/2263/43983 November 2014
The effect of advertising efforts on sales is of significant interest for global brands. Recent developments in emerging markets such as South Africa have brought the concept of consumer purchase behaviour in generating sales, under review. New media schedules are required to transition emerging market consumers to purchase products/services through effective marketing media platforms and through consumer brand equity whilst including price sensitivities into the media-mix. This study adds to the current literature by investigating which variables have the most significant influence in promoting and generating sales in emerging markets through the use of various advertising efforts. The primary focus was to establish an optimal marketing media schedule from which advertisers are able to choose a particular marketing media schedule to maximise their respective firms’ sales. This study investigated marketing media platforms, brand perceptions and price sensitivities. These included the influence of internet, television, radio, press and outdoor media platforms, price sensitivities and consumer brand equity in promoting sales within emerging markets. Data to support the relevant influences was gathered through secondary data from Nielsen Holdings N.V. (an American global information and measurement company) and the South African Research Audience Foundation (SAARF). Six washing detergent brands were selected for the study, where a complete data set could be sourced. The most influential variables in determining sales generation was consumer brand equity followed by price sensitivity. This allowed the derivation of a model extension from models identified in previous literature with the derived model including such influential variables by which brands could determine the most favourable marketing mix schedule and thereby allocate budgetary resources where necessary.
Exclusive: South African military in ‘critical decline’, review says
Wendell Roelf Reuters. 9:08 a.m. CDT, March 25, 2014.
Geo-politics SA –
See on www.chicagotribune.com
The communities around the Square Kilometre Array (SKA) are set to enter the information age with a R2,5-million boost that will equip schools and a community centre with IT hardware, software and …
ICT, community outreach, SAn – “Intel South Africa has launched several community projects in the tiny Karoo town of Carnarvon. The IT vendor is working with the SKA and the Department of Science and Technology to supply computers, educational materials, teacher training and internet access to the Carnarvon community centre and five schools in the three towns closest to the main SKA site – Carnarvon, Williston and Van Wyksvlei.”
See on www.it-online.co.za
A Green Paper for South Africa’s national integrated information and communications technology (ICT) policy would be gazetted for public comment in early December, Communications Minister Yunus Carrim told the Parliamentary Portfolio…
ICT Green paper –
See on www.engineeringnews.co.za
Estimated to have the world’s eighth-largest shale reserves, South Africa’s semi-desert Karoo wilderness has long aroused emotions for its beauty.
Estimates – “With nearly two-thirds the shale deposits estimated in the U.S., the Karoo could soon become a stomping ground for scientists and geologists mapping out shale gas fields that have been touted as game-changers for Africa’s biggest economy, and deciding whether fracking will work here. That is if energy companies and the African National Congress get their way, according to a Reuters report in BusinessDayLive.
A Shell-commissioned study by Cape Town-based consultancy Econometrix suggests extracting 50-trillion cubic feet, or 12.8 percent of potential reserves, would add nearly $20 billion, or 0.5 percent of gross domestic product, to South Africa’s economy every year for 25 years and create 700,000 jobs, BusinessDayLive reported.
Fracking, or hydraulic fracturing, involves digging wells up to 4 kilometers deep, then pumping in large amounts of water mixed with chemicals under high pressure to crack the shale rock and release the gas. – With the Kalahari Desert lying just to its north, the Karoo has very little water. Oil companies face a well-organised grassroots lobby opposed to anything that could upset its fragile environment.
South Africa’s richest man, Cartier billionaire Johann Rupert, promises to take a legal fight to the highest court if the government rushes into granting exploration licences. Rupert is worth an estimated $6.5 billion. – pro-fracking activists say a lengthy legal fight is inevitable. – “After the licence has been granted, there is going to be legal battle after legal battle after legal battle,” said Karoo Shale Gas Community Forum Chairman Vuyisile Booysen.
The first formal interest in shale gas in the Karoo began in 2008, with an application for exploration rights — still ungranted — by Bundu Oil & Gas, a subsidiary of Australia’s Challenger Energy.”
See on afkinsider.com
Nigeria Seeks Japan’s Support for Power, Infrastructure Development – AllAfrica.com
“For African countries, including Nigeria, to achieve a sustainable growth, it is imperative that agriculture be developed across the value chain.
Nigeria – Japan, infrastructure development
See on allafrica.com