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Raffi Indjejikian is the Robert L. Dixon Collegiate Professor of Accounting at the Stephen M. Ross School of Business at the University of Michigan. [1] His research is primarily focused on the development of models and theories illustrating the role of managerial accounting in decision-making through the basis of agency theory. [1]
Indjejikian holds a Bachelor of Commerce and Diploma of Public Accountancy from McGill University in Montreal, an M.B.A. from the University of Western Ontario, and a Ph.D. from the Wharton School at the University of Pennsylvania. Before gaining a full professorship position at the University of Michigan in September 2000, Indjejikian held Associate Professor positions at the University of Michigan and University of Chicago from July 1992 to August 2000. He was also Assistant Professor, Instructor, and Lecturer at the University of Chicago, University of Pennsylvania, and McGill University, respectively. [2]
Raffi Indjejikian's research on two-tiered financial reporting pertains to the differences between sophisticated and unsophisticated users. Unsophisticated users may lack knowledge and technology to be able to analyze such complicated financial statements and reports. Therefore, a competitive advantage is created for the sophisticated users while unsophisticated users are left with an “information overload”. Two-tiered reporting can be damaging to unsophisticated users specifically in situations where important information is being eliminated or when too much information is being extracted. [3]
Another focus of Indjejikian's research is the responsibilities and compensation of CEOs and CFOs of public and private corporations. Several of his papers have examined how firms design their bonus plans for the CFO and CEO and contrast those plans to decision making. The research of these papers was through surveys of members of the American Institute of CPA's. The main findings of these papers were that bonuses are based on the length of executive tenure, size of the firm, and length of the product development and life cycle. The papers also found public companies, relative to private companies have reduced the percentage of bonus based on financial reporting to the extent that the Sarbanes-Oxley Act has made firms much more concerned about the integrity of their financial reports and increased the costs of noncompliance. [4] [5]
With Nanda, Indjejikian argues that incentive problems are a crucial aspect of responsibility accounting. Due to the Ratchet effect, the employer would be better off if both parties can agree on a multi-period contract without subsequent revisions. Two responsibility center structures are analyzed: Consolidated structures are produced when managers are attributed to multiple activities. These structures imply less ratcheting but at the loss of comparative performance information. Specialized structures mean managers are responsible for one activity thus providing a higher level of comparative performance information but also a higher level of ratcheting. Performance evaluation in firms with specialized structures is more informative because of the use of comparative measurements. [6]
Corporate governance is the collection of mechanisms, processes and relations used by various parties to control and to operate corporations. Governance structures and principles identify the distribution of rights and responsibilities among different participants in the corporation and include the rules and procedures for making decisions in corporate affairs. Corporate governance is necessary because of the possibility of conflicts of interests between stakeholders, primarily between shareholders and upper management or among shareholders.
An incentive is something that motivates or drives one to do something or behave in a certain way. There are two type of incentives that affect human decision making. These are: intrinsic and extrinsic incentives. Intrinsic incentives are those that motivate a person to do something out of their own self interest or desires, without any outside pressure or promised reward. However, extrinsic incentives are motivated by rewards such as an increase in pay for achieving a certain result; or avoiding punishments such as disciplinary action or criticism as a result of not doing something.
The principal–agent problem, in political science and economics occurs when one person or entity, is able to make decisions and/or take actions on behalf of, or that impact, another person or entity: the "principal". This dilemma exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals, and is an example of moral hazard. Issues also arise when companies are incentivized to become increasingly deferential to management that have ownership stakes. As shareholders are dis-incentived to intervene, there are fewer checks on management. Issues can also arise among different types of management.
Personnel economics has been defined as "the application of economic and mathematical approaches and econometric and statistical methods to traditional questions in human resources management". It is an area of applied micro labor economics, but there are a few key distinctions. One distinction, not always clearcut, is that studies in personnel economics deal with the personnel management within firms, and thus internal labor markets, while those in labor economics deal with labor markets as such, whether external or internal. In addition, personnel economics deals with issues related to both managerial-supervisory and non-supervisory workers.
The chief risk officer (CRO) or chief risk management officer (CRMO) of a firm or corporation is the executive accountable for enabling the efficient and effective governance of significant risks, and related opportunities, to a business and its various segments. Risks are commonly categorized as strategic, reputational, operational, financial, or compliance-related. CROs are accountable to the Executive Committee and The Board for enabling the business to balance risk and reward. In more complex organizations, they are generally responsible for coordinating the organization's Enterprise Risk Management (ERM) approach. The CRO is responsible for assessing and mitigating significant competitive, regulatory, and technological threats to a firm's capital and earnings. The CRO roles and responsibilities vary depending on the size of the organization and industry. The CRO works to ensure that the firm is compliant with government regulations, such as Sarbanes-Oxley, and reviews factors that could negatively affect investments. Typically, the CRO is responsible for the firm's risk management operations, including managing, identifying, evaluating, reporting and overseeing the firm's risks externally and internally to the organization and works diligently with senior management such as Chief Executive officer and Chief Financial Officer.
Positive accounting is the branch of academic accounting research that seeks to explain and predict actual accounting practices. This contrasts with normative accounting, that seeks to derive and prescribe "optimal" accounting standards.
Michael Cole "Mike" Jensen is an American economist who works in the area of financial economics. Between 2000 and 2009 he worked for the Monitor Company Group, a strategy-consulting firm which became "Monitor Deloitte" in 2013. He holds the position of Jesse Isidor Straus Professor of Business Administration, Emeritus, at Harvard University.
Performance-related pay or pay for performance, not to be confused with performance-related pay rise, is a salary or wages paid system based on positioning the individual, or team, on their pay band according to how well they perform. Car salesmen or production line workers, for example, may be paid in this way, or through commission.
The term clawback or claw back refers to any money or benefits that have been given out, but are required to be returned due to special circumstances or events, such as the monies having been received as the result of a financial crime, or where there is a clawback provision in the executive compensation contract.
Bengt Robert Holmström is a Finnish economist who is currently Paul A. Samuelson Professor of Economics at the Massachusetts Institute of Technology. Together with Oliver Hart, he received the Central Bank of Sweden Nobel Memorial Prize in Economic Sciences in 2016.
Nelson Joosuk Chai is an American investment banker and financial executive. He formerly served as the chief financial officer of American financial services company Merrill Lynch and briefly as Bank of America's president for the Asia-Pacific region. He is the former president of CIT Group and reported directly to then CEO John Thain. On August 21, 2018, it was announced that Chai has been hired as the chief financial officer of Uber
Executive compensation is composed of both the financial compensation and other non-financial benefits received by an executive from their employing firm in return for their service. It is typically a mixture of fixed salary, variable performance-based bonuses and benefits and other perquisites all ideally configured to take into account government regulations, tax law, the desires of the organization and the executive.
Dhananjay "Dan" Gode is a Clinical Associate Professor of Accounting, Taxation, and Business law at New York University Stern School of Business. He teaches courses in corporate financial accounting, and also teaches for the TRIUM Global Executive MBA Program, an alliance of NYU Stern, the London School of Economics and HEC School of Management.
Professor Rezaul Kabir holds the Chair of Corporate Finance and Risk Management at the Faculty of Behavioural, Management and Social Sciences, University of Twente, The Netherlands. He is also the Head of the Department of Finance and Accounting.
Kevin James Murphy is a professor at the University of Southern California. Since 2006, Murphy has held the Kenneth L. Trefftzs Chair in Finance at the USC Marshall School of Business. He is also a Professor of Law at the USC Gould School of Law and Professor of Economics at USC's College of Letters, Arts & Science.
Campbell Russell "Cam" Harvey is a Canadian economist, known for his work on asset allocation with changing risk and risk premiums and the problem of separating luck from skill in investment management. He is currently the J. Paul Sticht Professor of International Business at Duke University's Fuqua School of Business in Durham, North Carolina, as well as a research associate with the National Bureau of Economic Research in Cambridge, Massachusetts. He is also a research associate with the Institute of International Integration Studies at Trinity College Dublin and a visiting researcher at the University of Oxford. He served as the 2016 president of the American Finance Association.
In the United States, the compensation of company executives is distinguished by the forms it takes and its dramatic rise over the past three decades. Within the last 30 years, executive compensation or pay has risen dramatically beyond what can be explained by changes in firm size, performance, and industry classification. This has received a wide range of criticism leveled against it.
Ole-Kristian Hope is a Norwegian economist, and Professor of Accounting at the Rotman School of Management, particularly known for his work on accounting standards and disclosure practices.
Ashish Nanda was Director of Indian Institute of Management Ahmedabad,
Luca Maestri is an Italian businessman. He is the senior vice president and chief financial officer at Apple Inc.
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