SHAMSUWATD ZUHA MOHD ABBAS, affiliation not provided to SSRN
Email: zuha@salam.uitm.edu.my
RASHIDAH ABDUL RAHMAN, Universiti Teknologi MARA (UiTM) - Bureau of Research and Consultancy (BRC)
Email: shidah@salam.uitm.edu.my
SAKTHI MAHENTHIRAN, Butler University
Email: smahenth@butler.edu

This paper examines the ultimate ownership structure on accounting performance of 31 Islamic financial institutions (IFIs) in Malaysia. The IFIs include the commercial banks, merchant banks, discount houses and development financial institutions (Bank Simpanan Nasional and Bank Pertanian Malaysia or currently Agro Bank) listed by Bank Negara for the year 2000 to 2006. The ownership structure is measured by the identity of the top 10 ultimate owners of the financial institutions. Performance is measured by the return on equity (ROE) and Non-Performing Loans (NPLs). Results of the study show that the ultimate owner of the majority of IFIs in Malaysia is the government. This is followed by foreign, family and institutional ownership. The statistical mean for the government ownership for the top 10 of the IFIs is about 36%. We find evidence that government, family and institutional ownership have significantly positive influence on ROE whereas none of the ownership investigated in this paper influence NPLs.

ARTHUR C. ALLEN, University of Nebraska at Lincoln - School of Accountancy
Email: aallen1@unl.edu
BRIAN P. MCALLISTER, University of Colorado at Colorado Springs
Email: bmcallis@uccs.edu

We investigate the relationship between private foundation performance and managerial pay. Private foundations are an unusual organizational form in that after the death of the founder, there are no donors or other external constituencies with the power and incentives to discipline management. Therefore, we expect that the pay-performance relationship may be negative. Because the purpose of a private foundation is to generate investment returns to be distributed to charities, we examine investment performance as well as administrative efficiency. Using a large sample of U.S. foundations over the period 1997-2005, we document that the relationship between pay and performance is negative in both levels and changes models and for both administrative and investment performance. Our findings contrast with studies investigating public charities and for-profit organizations which have generally found a positive pay-performance relationship. Our evidence suggests that foundations are often poorly monitored and foundation managers are often rewarded for poor performance. We discuss potential implications for policy makers concerned about foundation governance.