Responsible Executive Compensation for a New Era of Accountability Essay

Responsible Executive Compensation for a New Era of Accountability Essay

Length: 2389 words (6.8 double-spaced pages)

Rating: Powerful Essays

Open Document

Essay Preview

Compensation and the Chief Executive Officer

Executive compensation has come under increasing scrutiny in recent literature in the wake of the growing publicity surrounding managerial failures and executive self-interest. Financial experts have long been examining the problem of aligning the performance of executives with their salaries and benefits. Public discontent with the visible top-heaviness of the compensation structure has brought this issue into the spotlight throughout the business world. Experts point to the flaws of traditional payment schemes and offer a number of different solutions. Shareholder value and the success of the firm can be significantly affected by executive performance. Hence, understanding the advantages and costs of the current trends in executive compensation is crucial to the compensation committee of a Fortune 500 corporation.

The compensation committee has a difficult task upon its shoulders. It must construct pay programs that attract and retain the best talent to address the individual organization’s needs. It must design a strategy that generates superior returns for investors, appropriately measure managerial performance, and institute a pay practice which is fair to both employees and shareholders and which really drives business results (Mercer p.4). There is abundant theory and research on the strategies thought to accomplish these goals, and the emerging trends in executive compensation seem to be highly successful.

The growing public criticisms of ultra-high executive pay are not unfounded. According to Mr. Meizhu Lui, “the ratio of CEO pay as a multiple of average worker pay has grown tremendously, from 41 to 1 in 1960 to 411 to 1...

... middle of paper ... Resource Consulting. (Jan. 26, 2004). “Responsible Executive Compensation for a New Era of Accountability.” Perspective. Retrieved October 14, 2006, from

Mercer Human Resource Consulting. (Aug. 9, 2004.). Tackling the Challenge of Aligning Pay with Performance. Perspective. Retrieved October 14, 2006, from

Parrino, Robert. (2002). Rewrapping the package: Managerial incentives and corporate governance. Texas Business Review, 1(5). Retrieved Sept. 27, 2006, from the Business & Company Resource Center database.

Traichal, Patrick A., George W. Gallinger, and Steve A. Johnson. (1999). The relationship between pay-for-performance contracting and external monitoring. Managerial Finance, 68(21). Retrieved Sept. 27, 2006, from the Business & Company Resource Center database.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay about Jacksonian Era Free

- Jacksonian Era Free Ever since the second term of George Washington's presidency, America's politicians have worked within a two party political system. The first two parties were the Federalists and Anti-Federalists. The Federalist Party supported a strong centralized federal government, while the basis of Anti-Federalists political platform was exactly the antithesis. The two party system has survived for so long, because for every idea set-forth there are always those who will argue against it....   [tags: Papers]

Powerful Essays
1179 words (3.4 pages)

Cyber Warfare: Defending Against a New Form of Terrorism Essay

- Introduction Cyber warfare is a new type of terrorism is the United States. The United States National Security Team is responsible for handling computer warfare battles against hackers. The government should invest more money and resources in cyber warfare defense to protect our nation’s economy and infrastructure that is heavily dependent on technology. Imminent Threat The threat of a cyber-attack on our nation’s infrastructure is now viewed by the majority of American’s as an imminent and credible one that demands greater resources and spending....   [tags: hackers, threat, cyber-attack]

Powerful Essays
811 words (2.3 pages)

Who Is Responsible For Running The Company? Essays

- One can say that a person with a good combination of analytical, practical and creative intelligence is inclined to perform better in most pursuits in life. These types of intelligence are the key to underlying skills and abilities that will direct us to competent, accomplishing and productive life. For instance, as a chief executive officer, a top-ranking corporate position, who is responsible for running the company and often the company 's president, he may possess one or two of these types of intelligence....   [tags: Chief executive officer, Executive officer]

Powerful Essays
714 words (2 pages)

Essay on Work Environment And Duties : Chief Executive Officer

- Work Environment and Duties: Chief Executive Officers The duties of a Chief Executive Officer range from planning, directing, and coordinating operational activities to ensure the company meets its goals. The CEO reports to the board of trustees or to the owner of the organization. The duties of the CEO of an organization range depending on the size of the organization which means that they typically work more than 40 hours per week. Their duties consist of the following but are not limited to: • direct and oversee finances and budgets • manage general activities to ensure the product or service they offer is being done correctly • oversee the work of other executives who direct the activiti...   [tags: Chief executive officer, Executive officer]

Powerful Essays
1167 words (3.3 pages)

The Progressive Era And The New Deal Era Essay

- Thesis The Progressive Era and the New Deal Era had a significant amount of similarities with policies and programs to reform the American society and improve lives and fight poverty in America. Although the Progressive and New Deal Era had many similarities there were still differences between them. Both the Progressive and the New Deal Era’s main goal was to improve American society. Both of the Progressive and New Deal’s accomplishments were rooted from the economic depression and the need of change before the era, the Guilded age in the 19th century for the Progressive era, and the Great Depression for the New Deal era....   [tags: President of the United States]

Powerful Essays
1652 words (4.7 pages)

Executive Officer : Executive Officers Of Companies Essay example

- CEO compensations are awards and incentives given to the chief executive officers of companies. These awards could either be in the form of cash or in non-monetary forms. For instance, some executives are awarded huge numbers of shares in a company or are allowed to purchase the shares on their own but at subsidized prices. The sum of reimbursement on compensation to any chief executive officer is decided on by the board of directors to that particular company (Sam Ashe-Edmunds, 2014). The last few decades have seen dramatic and outrageous rises in executive compensations....   [tags: Chief executive officer, Executive officer]

Powerful Essays
1172 words (3.3 pages)

Effectiveness of Non-Executive Directors Essay

- The effectiveness of non-executive directors is becoming to be seen as critical for the contribution to the effectiveness of corporate governance in providing investor protection. Relevant situational and sectoral experience enhances the effectiveness of non-executive directors. Jebb (1998) cited in Ahwireng-Obeng, Mariano and Viedge (2005) suggests that it is a better strategy to hire non-executive directors who have experience in similar as well as other sectors and situations that the company is likely to face than search for a particular expertise in a director....   [tags: Senior Management, Non-Executive Directors]

Powerful Essays
1025 words (2.9 pages)


- Robert V. Remini’s discourse, The Jacksonian Era, defined two substantial political controversies during the Jacksonian era. First, the one-party political system, from Remini’s evidence, was an encumbrance to American politics. The two-party system was more valuable to running orderly societies. Second, Remini further articulated that a democratic government, rather than an administration run by elitists, was in the best interest for the sovereignty of the American people. The dual party’s re-birth to American politics and democracy emerged during Andrew Jackson’s 1828 campaign....   [tags: Jacksonian Era, Andrew Jackson, American History]

Powerful Essays
1538 words (4.4 pages)

Outline of Marriage in the Victorian Era Essay

- Outline of Marriage in the Victorian Era In the Victorian era, marriage was not as romanticized or fairytale-like as depicted in many novels of the time. On the contrary, love actually played a very minor role in the majority of matrimonies that took place. An engagement was entered into as one would approach a business deal, and there were some generally accepted rules and guidelines to follow. The Rules * It was illegal to marry your deceased wife’s sister. You could marry first cousins, but attitudes changed towards the end of the 19th century, and this became frowned upon....   [tags: Victorian Era]

Powerful Essays
899 words (2.6 pages)

Pawnbroking in the Victorian Era Essay example

- Pawnbroking in the Victorian Era Pleasant Riderhood “was an unlicensed pawnbroker, keeping what was popularly called a Leaving Shop, by lending insignificant sums on insignificant articles of property deposited with her as security.” The Leaving Shop was set up by Pleasant’s mother before she died (Dickens 345). Pawning To pawn goods was an easy, legal way to get cash. The shops were maintained to help people hide their hocking habits. Many shops had the entrance at the back of the building (“Pawnbrokers”)....   [tags: Victorian Era]

Powerful Essays
507 words (1.4 pages)