A Model of Equity Based Compensation with Tax

Widdicks, Martin; Zhao, Jinsha

doi:10.1111/jbfa.12085

Cited by 4 publications

(1 citation statement)

References 53 publications

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“…A small but growing literature is investigating the impact of tax on CEO compensation. For example, Widdicks and Zhao (2014) show that option exercise behaviours are affected by different tax rules. They find different compensation practices in the UK and the US are driven by the different tax treatment of CEO stock options.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Inside debt and firm risk‐taking: Evidence from the UK pension reform

Zhao

2020

Business Fin & Account

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This paper provides new evidence on the relation between CEO inside debt and firm risk‐taking by exploiting the change in the tax treatment of UK pensions following two pension amendments. The 2006 pension reform introduces the annual and lifetime allowance for UK pension schemes, significantly increasing income taxes associated with CEO inside debt. The 2011 allowance cut, which substantially reduces the annual allowance introduced in 2006, further increases income taxes on inside debt. We find that CEO inside debt, in the form of executive pensions declines after the 2006 reform while cash‐in‐lieu increases significantly. This effect is more severe after the 2011 allowance cut than the 2006 pension reform. UK firms appear to substitute away from pensions towards cash‐in‐lieu, where income taxes are less punishing. If the association between CEO inside debt and firm risk‐taking is causal, we should observe a change of risk‐taking after the decline of inside debt. Our results, which exploit the exogenous nature of the reforms, show that the decline of CEO pensions does not lead to any change in firm risk‐taking. This result suggests that no causal relationship exists between CEO inside debt and firm risk‐taking. Our results extend the inside debt literature, where empirical evidence is mainly documented in the US. Contrary to findings in the US, our evidence suggests that the use of CEO inside debt is motivated to minimise income tax rather than a tool to moderate firm risk.

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Section: Hypotheses Developmentmentioning

confidence: 99%

Inside debt and firm risk‐taking: Evidence from the UK pension reform

Zhao

2020

Business Fin & Account

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Is analytical tax research alive and kicking? Insights from 2000 until 2022

Niemann

Sailer

2023

J Bus Econ

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This literature review evaluates the development and impact of analytical tax research (ATR) from 2000 until 2022. Based on 345 research papers, we (1) identify emerging and declining research topics in the area of ATR, (2) examine the trends in publication outlets and author teams, and (3) analyze citation metrics at both the level of articles and authors to measure perception and impact of ATR. First, we find that rather new topics, such as the impact of taxation on entrepreneurship, innovation and R&D, have begun to attract attention. Second, tax journals are not the preferred outlet for ATR and author teams exhibit a decreasing gender imbalance. Third, citation metrics are highly centered on specific publications and individual authors. Moreover, publications that appeared in economics and finance journals generate disproportionately large citation numbers compared to those that were published in tax, accounting and business research journals. Authors from Anglo-American institutions have significantly more citations than researchers from German-speaking countries. We find that ATR does not form a closed community. It unites researchers from different backgrounds based on their— sometimes nonrecurring—thematic interest in the effects of taxation on economic decisions.

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Aktienbasierte erfolgsabhängige Entlohnung & Unternehmensbewertung

Schüler

2018

Schmalenbachs Z betriebswirtsch Forsch

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A Model of Equity Based Compensation with Tax

Cited by 4 publications

References 53 publications

Inside debt and firm risk‐taking: Evidence from the UK pension reform

Inside debt and firm risk‐taking: Evidence from the UK pension reform

Is analytical tax research alive and kicking? Insights from 2000 until 2022

Aktienbasierte erfolgsabhängige Entlohnung & Unternehmensbewertung

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