Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/221489
Title: STRUCTURE OF REIT MANAGEMENT COMPENSATION AND INTEREST OF SHAREHOLDERS: AN EMPIRICAL STUDY OF S-REIT
Authors: XIAO XUE
Keywords: Real Estate
Ong Seow Eng
REIT Management Fee
RE
2013/2014 RE
Agency Problem
DPU
Hurdle
Management Compensation
Singapore REITs
Issue Date: 21-May-2014
Citation: XIAO XUE (2014-05-21). STRUCTURE OF REIT MANAGEMENT COMPENSATION AND INTEREST OF SHAREHOLDERS: AN EMPIRICAL STUDY OF S-REIT. ScholarBank@NUS Repository.
Abstract: This paper examines 4 different management compensation structures of 22 Singapore REITs and their respective management fee as well as performances from 2002-2013. The main objectives are to (1) identify key determinants of management fee; (2) determine relationship between performance, fee structures and management fee, and more importantly (3) examine which management compensation structure is more effective to align managers’ interests with unit holders’ benefits. Total amount, fixed and variable components of management fee are studied as dependent variables, with 4 mutually exclusive performance fee structures (Index-hurdle, DPU growth hurdle, NPI based and non-NPI based), and key performance variable, dividend per unit (DPU). Results indicate that performance generally align with REIT managers’ remuneration. Hurdle-structures, largely driven by DPU growth hurdle, are effective in controlling level of performance fee and motivating managers to enhance greater performances compared to non-hurdle structures. However, a tendency to expropriate higher base fee is also observed for hurdle structures and controlling impact by hurdle structure on overall management fee remain puzzle. These findings suggest hurdle-structures generally better align interests with managers’ and unitholders, however to construct a more appropriate hurdle to monitor level of all components of management fee and promote better performance at the same time worth further research.
URI: https://scholarbank.nus.edu.sg/handle/10635/221489
Appears in Collections:Bachelor's Theses

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