Philipp E.M. Mueller

Studies argue that generalist CEOs are more valued by the market for executive labor and receive higher initial compensation. Challenging this prevailing assumption, we acknowledge the drawbacks of extensive career mobility and predict an inverted U-shape relationship between CEO generalist career experience and CEO initial compensation. Integrating the generalism and specialization views of human capital, we postulate that at an initial level, the acquisition of experience-breadth from different firms and industries enables CEOs to broaden their knowledge-base, obtain a variety of skills, and thus increase their labor-market value and initial compensation. After a threshold, however, the accumulation of extensive levels of career generalism through frequent job-hopping across firm and industry contexts gradually causes a lack of experience-depth and insufficient career specialization – thereby triggering lower CEO market-value and initial pay. Data from 197 CEO appointments in large publicly traded firms support our predictions. Our results also show that the observed inverted U-shape relationship varies with factors nested at different layers of context – highlighting the contingent nature of this area of research.

Adequately funding occupational pension funds is a major concern for society in general and individual contributors in particular. The low returns accompanied with high volatility in capital markets have put many funds in distress. While the basic contributions are mostly defined by the state, the fund’s situation may require additional contributions from the insureds or may allow the distribution of surpluses. In this paper, we focus on the accumulation phase of a defined contribution plan in Switzerland with minimum returns and annual solvency targets in terms of an assets-to-liabilities funding ratio. From the viewpoint of the pension fund, we evaluate the outcome of selected funding mechanisms on the solvency situation. Taking the perspective of the contributors, we analyse the payoff and the utility. Combining both prospects, we discuss the boundary values that trigger the various participation mechanisms and their impact. We find that remediation measures, while stabilising the fund, yield a higher volatility in the insureds con- tributions. Further, surplus distributions lower the relative payoff utility of the funds members and increase the frequency of remediation measures. Overall, insureds and pension funds will profit from a cautious surplus distribution policy that focuses on keeping the stability high and lowers the volatility of the result.