![\"Insurance](\"https:\/\/biznews.fiu.edu\/wp-content\/uploads\/2020\/02\/CEO-Compensation-study.jpg\")
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Compensation packages for insurance industry CEOs changed in the wake of the 2008 financial crisis, with bonuses reduced and other incentives increased, according to a new study from FIU Business.<\/p>\n
Total CEO compensation was positively related to return on assets (ROA) and firm size both before and after the financial crisis, the study found.<\/p>\n
However, after the crisis, the average size of bonuses was reduced by two-thirds. By contrast, stock award and non-equity incentives doubled, and option awards increased almost 70 percent compared to the pre-crisis period, tying compensation more closely to firm performance.<\/p>\n \u201cWe found that the shift in executive compensation was a response to the crisis,\u201d said Deanne Butchey, University Lecturer in the Department of Finance and one of the study\u2019s researchers. \u201cWe also found that when the CEO held a dual role, acting as also the chairman of the board, (s)he was better able to influence salary, bonuses, and long-term incentives. This influence declined in the post-crisis period.\u201d<\/p>\n The study, to be published in Managerial Finance,<\/em> looked at CEO compensation packages to determine whether total compensation, including salary, bonus structure and long-term incentive plan, were positively related to the insurance firms\u2019 post-crisis financial performance.<\/p>\n They compared annual data from 2001 to 2016 for 73 insurance companies and 134 CEOs at publicly traded, shareholder owned insurance companies in the property and casualty and life and health sectors.<\/p>\n \u201cThe new compensation structure improves the alignment of executives\u2019 compensation with shareholder interest. Firms will see an improvement in value creation as CEOs own an increasingly large portion of the company through stock ownership programs,\u201d said Butchey, who conducted the research with Jerry Haar, professor of international business at FIU Business, along with Rafiqul Bhuyan of Le Moyne College, and Bakhtear Talukdar of University of Wisconsin \u2013 Whitewater. \u201cIt also impacts the CEO, because as they become increasingly focused on the target, they know where to focus their energies.\u201d<\/p>\n Stepping outside the norm, Butchey and international business professor Jerry Haar employed interdisciplinary practices integrating the management and finance fields to conduct the research. The practice, noted Butchey, isn\u2019t as common as some professors and journals would like.<\/p>\n \u201cFrom a student-teaching standpoint, interdisciplinary research allows you to incorporate perspective from various disciplines,\u201d said Butchey. \u201cWhen you learn theories in management, they focus on exploring the interrelationships with finance. Faculty who work together with this type of research can help their students make the connection.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Compensation packages for insurance industry CEOs changed in the wake of the 2008 financial crisis, with bonuses reduced and other incentives increased, according to a new study from FIU Business. Total CEO compensation was positively related to return on assets (ROA) and firm size both before and after the financial crisis, the study found. However, […]<\/p>\n","protected":false},"author":67,"featured_media":33775,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[4],"tags":[595,619,4377,4519,1288],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/posts\/33771"}],"collection":[{"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/users\/67"}],"replies":[{"embeddable":true,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/comments?post=33771"}],"version-history":[{"count":2,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/posts\/33771\/revisions"}],"predecessor-version":[{"id":33781,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/posts\/33771\/revisions\/33781"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/media\/33775"}],"wp:attachment":[{"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/media?parent=33771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/categories?post=33771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/biznews.fiu.edu\/wp-json\/wp\/v2\/tags?post=33771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Deanne](\"https:\/\/biznews.fiu.edu\/wp-content\/uploads\/2020\/02\/butcheyd.jpg\")
![\"Jerry](\"https:\/\/biznews.fiu.edu\/wp-content\/uploads\/2016\/09\/jerry-haar.jpg\")