An Introduction to Executive Compensation

An Introduction to Executive Compensation

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General readers have no idea why people should care about what executives are paid and why they are paid the way they are. That's the reason that The Wall Street Journal, Fortune, Forbes, and other popular and practitioner publications have regular coverage on them. This book not only proposes a reason--executives need incentives in order to maximize firm value (economists call this qagency theoryq)--it also describes the nature and design of executive compensation practices. Those incentives can take the form of benefits (salary, stock options), perquisites (reflecting the status of the executive within the organizational culture. This book is important because it takes the elements of an executive compensation package apart, analyzing them in the contexts of both economic theory and corporate practice and then explains how, under varying conditions, one might construct a compensation package that optimizes an executive's and a corporation's performance. Key Features * Presents an objective analysis of current executive compensation practices * Comprehensively reviews of academic literature and extant practice * Explains and illustrates the various components of the compensation package * Discusses the incentive, financial reporting, tax, political, equity, and firm value effects of those componentsaquot;CEOs in the UK receive 59% of their total pay in the form of base salaries, 18% in bonuses, 10% in share options (valued at ... In contrast, base salaries comprise a much smaller percentage of total pay tor United States executives ( only 29%), while share ... Still, compensation of United States executives does not always exceed that of their British counterparts. For example, in Britain, Glaxo Wellcomea#39;s chairman, Sir Richard Sykes, earned $2.9 million in 1997, which was more than theanbsp;...

Title:An Introduction to Executive Compensation
Author:Steven Balsam
Publisher:Academic Press - 2002


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