The Role And Effect Of Corporate Governance And Remuneration Consultants On Ceo Compensation

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The Role and Effect of Corporate Governance and Remuneration Consultants on CEO Compensation

Author : Saleh Ali F. Alagla
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (798 download)

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Book Synopsis The Role and Effect of Corporate Governance and Remuneration Consultants on CEO Compensation by : Saleh Ali F. Alagla

Download or read book The Role and Effect of Corporate Governance and Remuneration Consultants on CEO Compensation written by Saleh Ali F. Alagla and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates the role and effect of different aspects of corporate governance, ownership structure and remuneration consultants on determining the level and the structure of CEO compensation. The main objective of this research is to better understand the impact of these aspects on compensation of Chief Executive Officers (CEOs) in UK firms. Two models are constructed and a set of hypotheses is developed. These models are tested using a sample consisting of the top 350 companies listed on the London Stock Exchange. Firms in the financial, investment and insurance industries are excluded due to the different nature of their accounting, governance, and compensation practices. The study covers the period of five financial years (2004-2008). Twenty-two hypotheses are derived from both models. These hypotheses are tested using multivariate techniques in order to determine to what extent corporate governance, ownership and remuneration consultants' attributes play a role in monitoring managers and setting appropriate CEO compensation. Using a sample of 237 non-financial FTSE 350 firms during 2004-2008 (i.e. 851 firm-year observations), and after controlling for the standard economic and human capital determinants of compensation, this study finds that corporate governance, ownership and remuneration consultants' characteristics play an important role in determining CEO compensation. However, the findings do not suggest that these attributes always play a positive role in constraining opportunistic managerial behaviour. Surprisingly, some of the governance attributes have been found to facilitate the executives' needs rather than to attempt to monitor them. The findings of the thesis suggest that a number of theoretical perspectives can be used to explain the relationship between corporate governance, remuneration consultants and CEO compensation in the UK firms. For example, while the findings of board independence and CEO duality provide strong support to the stewardship theory, as firms enjoy better compensation governance when their boards contain more executive directors and are chaired by CEOs, the results of chairman independence and ownership, and remuneration committee independence, are found to be in line with both agency theory and the alignment of interests' hypothesis of agency theory since we find these variables play a strong role in mitigating the agency problems and agency costs through setting appropriate CEO compensation. Conversely, the managerial power perspective receives great support from the findings of a number of governance, ownership, and consultants' variables. That is, the analysis concludes that larger boards, well-compensated board and remuneration committee non-executive directors, CEOs with greater share ownership, CEOs sitting on the remuneration committee, less independent remuneration consultants, and the switch of remuneration consultants all play significant roles in increasing the level of CEO compensation and setting inappropriate designs for remuneration that are more favourable to the CEO (i.e. more fixed and less equity-based compensation). Overall, the findings of this thesis imply that shareholders, regulators, and practitioners should be concerned about the composition and the characteristics of a firm's board of directors, remuneration committee, and external directors who comprise the firm's internal control structure as this research finds that the quality of corporate and compensation governance varies depending on board and remuneration committee size and characteristics. Furthermore, it is advised that the relevant parties should pay attention to the remuneration consultants' independence status and characteristics since this study finds that independent, specialized, and larger remuneration consultants play a significant role in enhancing the quality of compensation arrangements. Therefore, this study offers new insights over the effect that corporate governance and remuneration consultants can exert over the design of CEO compensation contracts.

Comparative Corporate Governance and Executive Remuneration

Author : Simon Staude
Publisher : GRIN Verlag
ISBN 13 : 3668043132
Total Pages : 32 pages
Book Rating : 4.6/5 (68 download)

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Book Synopsis Comparative Corporate Governance and Executive Remuneration by : Simon Staude

Download or read book Comparative Corporate Governance and Executive Remuneration written by Simon Staude and published by GRIN Verlag. This book was released on 2015-09-10 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2014 in the subject Business economics - Investment and Finance, , language: English, abstract: The justification of a company having a remuneration committee (hereinafter “RemCo”) is simple and based on the “agency theory” whereby directors are employed to act as proxies for shareholders and manage a companies’ business on their behalf. However, their powers allow them to manage the business in a manner, which facilitates their own interests. Excessive remuneration and bonus schemes are probably the most controversial outcomes which may be considered as a result of this principle. The UK Corporate Governance Code (hereinafter “the Code”) has tried to deal with this issue, providing principles to establish an appropriate level of remuneration for directors and to align this remuneration with the interest of the shareholders. However, the salaries of CEOs of FTSE100 companies have increased significantly over the last ten years. This is supported by a recent Manifest survey which shows that FTSE100 RemCos still grant remuneration packages above the inflation rate and the average pay increase of employees. As the level of remuneration has increased considerably in recent years, it is indeed questionable whether multi-million salaries for directors can be justified when taking into account economic or fairness reasons and whether RemCos undertake their responsibilities properly. As well as providing the theoretical and legal background and the rationale behind the establishment of RemCos Section 1 of this essay questions the level of remuneration and assesses, whether it can be justified on economic or fairness grounds. Whereas Section 2 shows that the RemCos are not solely responsible for the ratcheting up of executive payments since external factors such as pay consultants influence the remuneration design. The essay demonstrates that the current way RemCos undertake their responsibilities raise major concerns and leaves room for improvement. Section 3 evaluates the recent reforms, such as enhanced disclosure requirements related to the role of remuneration consultants and suggests that these reforms are the first step in the right direction to re-balance executive remuneration but will also show that the execution of these reforms can be considered as rather poor and will have little effect. The essay concludes finally that remuneration committees are only partly responsible for increasing remuneration levels and that further reforms are still necessary.

Research Handbook on Executive Pay

Author : John S. Beasley
Publisher : Edward Elgar Publishing
ISBN 13 : 1781005109
Total Pages : 553 pages
Book Rating : 4.7/5 (81 download)

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Book Synopsis Research Handbook on Executive Pay by : John S. Beasley

Download or read book Research Handbook on Executive Pay written by John S. Beasley and published by Edward Elgar Publishing. This book was released on 2012-01-01 with total page 553 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research on executive compensation has exploded in recent years, and this volume of specially commissioned essays brings the reader up-to-date on all of the latest developments in the field. Leading corporate governance scholars from a range of countries set out their views on four main areas of executive compensation: the history and theory of executive compensation, the structure of executive pay, corporate governance and executive compensation, and international perspectives on executive pay. The authors analyze the two dominant theoretical approaches – managerial power theory and optimal contracting theory – and examine their impact on executive pay levels and the practices of concentrated and dispersed share ownership in corporations. The effectiveness of government regulation of executive pay and international executive pay practices in Australia, the US, Europe, China, India and Japan are also discussed. A timely study of a controversial topic, the Handbook will be an essential resource for students, scholars and practitioners of law, finance, business and accounting.

The Theory and Practice of Directors' Remuneration

Author : Alexander Kostyuk
Publisher : Emerald Group Publishing
ISBN 13 : 1785606824
Total Pages : 299 pages
Book Rating : 4.7/5 (856 download)

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Book Synopsis The Theory and Practice of Directors' Remuneration by : Alexander Kostyuk

Download or read book The Theory and Practice of Directors' Remuneration written by Alexander Kostyuk and published by Emerald Group Publishing. This book was released on 2016-01-06 with total page 299 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book argues for a correct balance between risk and reward and for Directors' remuneration to be equitable to all parties and stakeholders. By examining the current theories, practices and regulations and explaining them in detail it provides a state of the art overview of one of the key corporate governance issues of our time.

The Regulation of Executive Compensation

Author : Kym Maree Sheehan
Publisher : Edward Elgar Publishing
ISBN 13 : 0857938339
Total Pages : 255 pages
Book Rating : 4.8/5 (579 download)

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Book Synopsis The Regulation of Executive Compensation by : Kym Maree Sheehan

Download or read book The Regulation of Executive Compensation written by Kym Maree Sheehan and published by Edward Elgar Publishing. This book was released on 2012-01-01 with total page 255 pages. Available in PDF, EPUB and Kindle. Book excerpt: ïBased on extensive interviews with those directly involved in the executive pay setting process _ executives themselves, remuneration committee members, remuneration consultants, and institutional investors _ this excellent study finally explains how, despite repeated regulation over the past twenty years in both the UK and Australia, limits on the amount executives get paid, and a clear relationship between pay and performance remain as elusive as ever. Dr. SheehanÍs study suggests that by targeting the pay setting process rather than pay itself, regulation may have contributed, albeit unintentionally, to the endless upward ratcheting of absolute levels of executive pay.Í _ John Roberts, University of Sydney, Australia ïFor those that believe executive remuneration in the UK and Australia is too high and poorly aligned with company performance, this book provides an excellent analytical framework and strong arguments in favor of greater shareholder oversight of remuneration practices and pay levels. It is well-written, carefully argued and persuasive in its treatment of the subject. I wholeheartedly recommend it.Í _ Randall S. Thomas, Vanderbilt University Law School, US In this timely book, Kym Sheehan examines the regulatory technique known as ïsay on payÍ _ where shareholders vote on executive compensation in an annual, advisory vote on the remuneration report. Using the model of the regulated remuneration cycle, and drawing upon evidence of its operation from interviews, voting data and remuneration reports from UK and Australian companies, the book demonstrates whether say on pay can operate successfully to both constrain executive greed and ensure accountability exists for company performance and decision-making. The Regulation of Executive Compensation is essential reading for corporate governance academics, remuneration consultants, company directors, regulators, pension and superannuation fund trustees and unions. Politicians and their policy advisers, lawyers, accountants and anyone concerned about the corporate governance of listed companies will find much to interest them in this detailed study.

The Role and Effect of Corporate Governance and Renumeration Consultants on CEO Compensation

Author : Saleh Ali F. Alagla
Publisher :
ISBN 13 :
Total Pages : 275 pages
Book Rating : 4.:/5 (913 download)

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Book Synopsis The Role and Effect of Corporate Governance and Renumeration Consultants on CEO Compensation by : Saleh Ali F. Alagla

Download or read book The Role and Effect of Corporate Governance and Renumeration Consultants on CEO Compensation written by Saleh Ali F. Alagla and published by . This book was released on 2012 with total page 275 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Pay Without Performance

Author : Lucian A. Bebchuk
Publisher : Harvard University Press
ISBN 13 : 9780674020634
Total Pages : 308 pages
Book Rating : 4.0/5 (26 download)

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Book Synopsis Pay Without Performance by : Lucian A. Bebchuk

Download or read book Pay Without Performance written by Lucian A. Bebchuk and published by Harvard University Press. This book was released on 2004 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance.

Executive Compensation and Shareholder Value

Author : Jennifer Carpenter
Publisher : Springer Science & Business Media
ISBN 13 : 1475751923
Total Pages : 159 pages
Book Rating : 4.4/5 (757 download)

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Book Synopsis Executive Compensation and Shareholder Value by : Jennifer Carpenter

Download or read book Executive Compensation and Shareholder Value written by Jennifer Carpenter and published by Springer Science & Business Media. This book was released on 2013-04-17 with total page 159 pages. Available in PDF, EPUB and Kindle. Book excerpt: Executive compensation has gained widespread public attention in recent years, with the pay of top U.S. executives reaching unprecedented levels compared either with past levels, with the remuneration of top executives in other countries, or with the wages and salaries of typical employees. The extraordinary levels of executive compensation have been achieved at a time when U.S. public companies have realized substantial gains in stock market value. Many have cited this as evidence that U.S. executive compensation works well, rewarding managers who make difficult decisions that lead to higher shareholder values, while others have argued that the overly generous salaries and benefits bear little relation to company performance. Recent conceptual and empirical research permits for the first time a truly rigorous debate on these and related issues, which is the subject of this volume.

Executive Compensation Best Practices

Author : Frederick D. Lipman
Publisher : John Wiley & Sons
ISBN 13 : 9780470283035
Total Pages : 336 pages
Book Rating : 4.2/5 (83 download)

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Book Synopsis Executive Compensation Best Practices by : Frederick D. Lipman

Download or read book Executive Compensation Best Practices written by Frederick D. Lipman and published by John Wiley & Sons. This book was released on 2008-06-27 with total page 336 pages. Available in PDF, EPUB and Kindle. Book excerpt: Executive Compensation Best Practices demystifies the topic of executive compensation, with a hands-on guide providing comprehensive compensation guidance for all members of the board. Essential reading for board members, CEOs, and senior human resources leaders from companies of every size, this book is the most authoritative reference on executive compensation.

Executive Compensation and Earnings Management Under Moral Hazard

Author : Bo Sun
Publisher : DIANE Publishing
ISBN 13 : 1437930980
Total Pages : 33 pages
Book Rating : 4.4/5 (379 download)

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Book Synopsis Executive Compensation and Earnings Management Under Moral Hazard by : Bo Sun

Download or read book Executive Compensation and Earnings Management Under Moral Hazard written by Bo Sun and published by DIANE Publishing. This book was released on 2010-08 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analyzes executive compensation in a setting where managers may take a costly action to manipulate corporate performance, and whether managers do so is stochastic. Examines how the opportunity to manipulate affects the optimal pay contract, and establishes necessary and sufficient conditions under which earnings management occurs. The author¿s model provides a set of implications on the role earnings management plays in driving the time-series and cross-sectional variation of executive compensation. In addition, the model's predictions regarding the changes of earnings management and executive pay in response to corporate governance legislation are consistent with empirical observations. Charts and tables.

Responsible Executive Compensation for a New Era of Accountability

Author : Peter T. Chingos
Publisher : John Wiley & Sons
ISBN 13 : 0471655082
Total Pages : 322 pages
Book Rating : 4.4/5 (716 download)

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Book Synopsis Responsible Executive Compensation for a New Era of Accountability by : Peter T. Chingos

Download or read book Responsible Executive Compensation for a New Era of Accountability written by Peter T. Chingos and published by John Wiley & Sons. This book was released on 2004-04-12 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt: A definitive road map to help companies assess and refine their executive reward strategies. Responsible pay has become inextricably linked with corporate governance and long-term shareholder value creation. Responsible Executive Compensation for a New Era of Accountability shows you how to revamp your executive compensation programs to drive shareholder value creation while adhering to the high standards of the new corporate governance environment. Packed with case studies, diagnostics, and contributions from world-renowned experts in executive compensation, this vital resource offers a comprehensive overview of the critical issues affecting executive compensation practice and theory during this new era. Order your copy today!

The Handbook of the Economics of Corporate Governance

Author : Benjamin Hermalin
Publisher : Elsevier
ISBN 13 : 0444635408
Total Pages : 762 pages
Book Rating : 4.4/5 (446 download)

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Book Synopsis The Handbook of the Economics of Corporate Governance by : Benjamin Hermalin

Download or read book The Handbook of the Economics of Corporate Governance written by Benjamin Hermalin and published by Elsevier. This book was released on 2017-09-18 with total page 762 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Handbook of the Economics of Corporate Governance, Volume One, covers all issues important to economists. It is organized around fundamental principles, whereas multidisciplinary books on corporate governance often concentrate on specific topics. Specific topics include Relevant Theory and Methods, Organizational Economic Models as They Pertain to Governance, Managerial Career Concerns, Assessment & Monitoring, and Signal Jamming, The Institutions and Practice of Governance, The Law and Economics of Governance, Takeovers, Buyouts, and the Market for Control, Executive Compensation, Dominant Shareholders, and more. Providing excellent overviews and summaries of extant research, this book presents advanced students in graduate programs with details and perspectives that other books overlook. - Concentrates on underlying principles that change little, even as the empirical literature moves on - Helps readers see corporate governance systems as interrelated or even intertwined external (country-level) and internal (firm-level) forces - Reviews the methodological tools of the field (theory and empirical), the most relevant models, and the field's substantive findings, all of which help point the way forward

Executive remuneration. The Tate & Lyle PLC case study

Author : Christos Boras
Publisher : GRIN Verlag
ISBN 13 : 3668918686
Total Pages : 74 pages
Book Rating : 4.6/5 (689 download)

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Book Synopsis Executive remuneration. The Tate & Lyle PLC case study by : Christos Boras

Download or read book Executive remuneration. The Tate & Lyle PLC case study written by Christos Boras and published by GRIN Verlag. This book was released on 2019-04-08 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: Doctoral Thesis / Dissertation from the year 2014 in the subject Business economics - Business Management, Corporate Governance, grade: 72%, Aston University (Business School), course: MSc in Accounting and Finance, language: English, abstract: This report provides an analysis and evaluation over the executive remuneration issues. The basic issues in this report raised the public debate and the academic literature findings over the misalignment between the pay and performance and the level of executives’ emoluments. In order to provide a more specific and practical perspective of the issues raised, this project used a case study of Tate & Lyle plc. and its main competitor Associated British Foods plc. Methods of analysis include the review over the UK corporate governance evolution on executive remuneration matters. The second part of the review is based on the academic literature review. Furthermore, the internal structure of both companies and the level of salaries in the hierarchy give an explanation over the level of the executive emoluments. Moreover, the structure of the executive remuneration is approved in both companies by the majority of the shareholders and there is evidence that the short-term and long-term performance of the companies have an important effect on executives’ salary. Last but not least, there is evidence that the executive remuneration is almost the same across the same industry even if the performance between two companies is different. The report finds that both companies are in line with UK corporate governance code guidelines and aligned pay with performance. However, there are not adequate case studies through different industries in order to have a more precise information over the relationship between pay and performance of other companies. The major area of weakness on the academic literature is the lack of case studies which can provide more detailed information of practical implementations of the Code and academic literature. Moreover, the institutions and most of the academic research is based on using average figures based on the FTSE100, FTSE250 and FTSE350 Indexes. The report also investigates the fact that the analysis conducted has limitations. Some of the limitations include the lack of ABF’s annual report for 2014. In order to overpass this difficulty, this project used the annual report of 2013 for both companies. Another limitation was the lack of case studies over the executive remuneration issues based on certain companies rather than the average trend of an Index. Last but not least, there was no other case study of a company over the executive remuneration issues in order to use the methodology.

The Professional Standards of Executive Remuneration Consultants

Author : Calvin Jackson
Publisher : Taylor & Francis
ISBN 13 : 1000846598
Total Pages : 231 pages
Book Rating : 4.0/5 (8 download)

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Book Synopsis The Professional Standards of Executive Remuneration Consultants by : Calvin Jackson

Download or read book The Professional Standards of Executive Remuneration Consultants written by Calvin Jackson and published by Taylor & Francis. This book was released on 2023-05-01 with total page 231 pages. Available in PDF, EPUB and Kindle. Book excerpt: Love them or hate them, executive remuneration consultants are key players in remuneration committees’ pay determination processes. This book concerns the professional standards of executive remuneration consultants (and their ‘in-house’ counterparts; for example, Human Resources Director and Head of Reward) in providing remuneration committee advisory services. The author is a 25-year ‘veteran’ executive remuneration consultant, having worked around the world in this capacity (particularly in the financial services sector). This book is based on a qualitative empirical doctoral research exercise, involving 53 participants in the UK executive pay scene (including regulators, institutional shareholder bodies, proxy advisors, remuneration committees’ chairs/members, executive remuneration consultants and in-house executive reward specialists). The objective was to formulate conclusions that could be used to the benefit of UK practice and contribute to the relevant academic scholarship on executive remuneration consultants. The research covered 18 aspects, ranging from an examination of the independence of such consultants to whether there might be a specialised accreditation/qualification and/or licence to practise regime covering their services. It provides novel insights into this previously under-researched area of corporate governance/financial regulation. This book will be of interest to those involved in the UK executive remuneration scene, whether government, regulators or any of the other parties mentioned already (plus academics in universities and business schools). It is hoped too that overseas remuneration regimes that have respects in common with the UK’s will find this book useful.

Pay Without Performance

Author : Lucian Bebchuk
Publisher :
ISBN 13 :
Total Pages : 312 pages
Book Rating : 4.3/5 (91 download)

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Book Synopsis Pay Without Performance by : Lucian Bebchuk

Download or read book Pay Without Performance written by Lucian Bebchuk and published by . This book was released on 2004-11-22 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt: A powerful critique of executive compensation and corporate governance, "Pay Without Performance" points the way to restoring corporate integrity and improving corporate performance.

Executive Compensation

Author : Edge
Publisher : Windsor Professional Information
ISBN 13 : 9781893190252
Total Pages : 564 pages
Book Rating : 4.1/5 (92 download)

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Book Synopsis Executive Compensation by : Edge

Download or read book Executive Compensation written by Edge and published by Windsor Professional Information. This book was released on 2004 with total page 564 pages. Available in PDF, EPUB and Kindle. Book excerpt: Drawing from nine of the leading compensation advisory firms in the country, Executive Compensation: The Professional's Guide to Current Issues and Practices is the first publication to bring together a number of the top practitioners and experts in the field to provide the information and insights needed to navigate within the new era of accountability and performance standards.

Indispensable and Other Myths

Author : Michael Dorff
Publisher : Univ of California Press
ISBN 13 : 0520281012
Total Pages : 326 pages
Book Rating : 4.5/5 (22 download)

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Book Synopsis Indispensable and Other Myths by : Michael Dorff

Download or read book Indispensable and Other Myths written by Michael Dorff and published by Univ of California Press. This book was released on 2014-08-01 with total page 326 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prodded by economists in the 1970s, corporate directors began adding stock options and bonuses to the already-generous salaries of CEOs with hopes of boosting their companiesÕ fortunes. Guided by largely unproven assumptions, this trend continues today. So what are companies getting in return for all the extra money? Not much, according to the empirical data. In Indispensable and Other Myths: Why the CEO Pay Experiment Failed and How to Fix It, Michael Dorff explores the consequences of this development. He shows how performance pay has not demonstrably improved corporate performance and offers studies showing that performance pay cannot improve performance on the kind of tasks companies ask of their CEOs. Moreover, CEOs of large established companies do not typically have much impact on their companiesÕ results. In this eye-opening exposŽ, Dorff argues that companies should give up on the decades-long experiment to mold compensation into a corporate governance tool and maps out a rationale for returning to the era of guaranteed salaries.