...To what extent does parliament control executive power? Parliament remains the center of debate for MP's and parties, however it's the executive government that has overhauling power of formulating and executing policies. As head of the executive branch of government the Prime enjoys considerable power. The executive would be commonly known to have considerable power but you could argue that parliament places restraints and controls certain aspects of it. Parliament can be considered weak in different ways. One of those is the presence of party loyalty in the commons. MP's are elected and will have a strong mandate to support the party's policies. Defying the party leadership would prove too difficult and could be seen as a betrayal of the mandate. In turn, MP's will feel bound to the mandate made, encouraging them not to challenge the executive and support it's decisions. Another party factor is the overall majority the government has in parliament. The first past the post system guarantees this majority . The conservative party in the current House of Commons has 101 more seats than Labour. This demonstrates the vast majority of Conservative MP's from the 2015 general election. More importantly, for parliament to build momentum against the executive it would be difficult as roughly half the chamber are in the Prime Ministers party. In summary, party loyalty and is a beneficial to the executive's hold of power. However, Parliament does remain effective in different...
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...Executive Pay Strategic Issues and Problems: As a result of the current economic crises, many companies are experiencing massive financial losses. These companies are reducing salaries and cutting peoples’ jobs while executives are maintaining high compensations. Using tax payer’s money, the US Government is assisting these financially struggling companies through the Troubled Asset Relief Program (TARP). TARP was created to assist these companies to ultimately allow them to survive and prevent massive job loss. Tax payers are concerned about executives receiving a high and unjust compensation in comparison to other non-executives whom are suffering from layoffs and compensation cuts. Executive compensation is controlled by the companies’ boards that in turn work under the Chief Executives. The US Government is intervening by proposing plans to regulate the compensation of executives in these financially stressed companies. Evaluation and Analysis: Compensation of executives is not regulated or monitored effectively. Executives have the ability to use deceptive and manipulative practices to achieve higher unjust compensations. Boards justify the high compensations as rewarding performance, which is contradicting considering the financial status of these companies. People are becoming outraged as many are losing their jobs and are receiving salary reductions while executives are still making millions. The US government is imposing executive compensation regulations to...
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...Executive Compensation: Do you get what you pay for? Some would say that top executives are not overpaid. This side of the argument is based on the premise that top executives are paid well, but not overpaid. Many people see CEO pay packages but do not look further to see that a CEO's pay is not the whole story. What are the factors that might support a high executive compensation package? It is usually the most extreme cases of overpay that hit the press. Proponents of the argument that top executives are not overpaid state that most of the complaints about executive compensation center around extreme cases of overpay, and such cases blind us to the fact that the majority of executives are paid fairly. One example of this is the case of Lee Raymond, former head of Exxon Mobile. When he retired from the company in 2006, the price of gasoline at the pump was high, $3 per gallon, much to the consternation of consumers. Yet Exxon Mobile rewarded Raymond with a record retirement package--a "golden parachute," as it is known--to the tune of $400 million. The combination of exorbitant CEO pay and painfully high gas prices rubbed most observers the wrong way. A similar situation occurred in the case of Robert Nardelli of Home Depot. When Nardelli retired in 2007 with a pay package worth $210 million, the company he headed had just gone through several straight years of relatively poor performance. People wanted to know why the chief executive received such an exceptional payout...
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...Session 9 Samstag, 6. September 2014 13:30 Session 9 Prep Topic: CEO compensation Reading • Résumé Pedro Matos, Darden Professor • Chapter 7 in Corporate Governance • Chapter 7 in Boards That Deliver • Bargain Bosses, American chief executives are not overpaid, The Economist • How to get paid like a U.S. CEO, Fortune • Executive Compensation Corporate Governance: Chapter 7 - CEO Compensation • Norms for CEO compensation ○ Proxy statements provide information on executive compensation and are distributed ahead of shareholder meetings ○ There is a positive correlation between firm size and total CEO compensation ○ The higher the CEO total compensation, the larger the percentage of non-cash compensation (bonus) • The Goal of executive compensation • What is good performance? ○ Current circumstances, its goals and the execution of its strategies ○ Compensation should include short- and long-term plans ○ Long-term: achieving strategic goals (e.g. financial) ○ Compensation/performance should be benchmarked against peers • Building a compensation plan ○ Peer comparison is the beginning, but should not be the only determinant of CEO compensation ○ Gradual rise of CEO compensation is due to the matching with competitive compensation as soon as one competitor increases compensation • Compensation mix ○ Base salary Have average base salaries with at-risk copmensation when performance is superior ○ Fringe Benefits 30-50% of base salary Medical and life insurance premiums,...
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...EXECUTIVE COMPENSATION 1. HOW IS IT DETERMINED? Executive compensation generally consists of a mix of four components: - Annual Base Salary - Annual Incentive or bonus plans tied to short-term performance measures. - Long Term Incentives consisting in a mix of restricted stocks, stocks options and other long-term performance plans tied to shareholder return or financial performance. - Benefits plans. As a rule of thumb, the base salary constitutes 30% of total compensation, the annual incentive another 20%, the benefits about 10% and long-term incentives or the wealth creation portion of the compensation about 40%. Indeed, before the financial crisis, there was a lot of board attention to improving the relationship between pay and performance. As boards sought to achieve pay for performance, one outcome of the trend was to place more emphasis on performance vested restricted stock for the top executives. Thus, an increased portion of executive compensation was primarily tied to what, in the long term, most institutional investors tend to focus on: long-term performance as measured by total shareholder return or performance metrics that drive shareholder return. 2. SHOULD EXECUTIVES RECIVE STOCKS OPTIONS? Supporters of stock options say they align the interests of CEOs to those of shareholders, since options are valuable only if the stock price remains above the option's strike price. Stock options are now counted as a corporate expense (non-cash), which impacts a...
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...The objective of a properly designed executive compensation package is to attract, retain, and motivate CEOs and senior management. Despite substantial heterogeneity in pay practices across firms, most CEO compensation packages contain five basic components: salary, annual bonus, payouts from long‐term incentive plans, restricted option grants, and restricted stock grants. In addition, CEOs often receive contributions to defined‐benefit pension plans, various perquisites, and, in case of their departure, severance payments It has been seen that the increase in executive compensation has far outweighed the rise of regular employee compensation the objective of this paper is to investigate the pay-for-performance link in executive compensation. In the context of executive compensation, an analysis needs to be undertaken both from an economic as well as a regulatory policy perspective. To provide a holistic understanding both global as well as Indian Organisations are considered for the analysis. From the economic perspective we look into the following • Executive Compensation and Agency Problem • Executive Compensation and Risk Management • The sensitivity of CEO wealth to firm performance • The relation between CEO incentives and firm value • Explaining CEO compensation: Rent extraction or competitive pay? From the regulatory and legal perspective • Regulatory controls as under o SEC o SEBI • Tax Code Changes o Tax Law 162(m) signed in 1993 of the Federal...
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...Regulation of Executive Compensation and its impact on the stability of the financial system | | Introduction In corporate circles, the financial crisis and its effect on companies is sometimes illustrated as a systematic phenomenon in which there is no individual responsibility. Public discussion, on the contrary often assigns the blame of the crisis to bankers or managers, and suggests conclusions of salary reductions or individual liability in terms of losses. In this paper the implications of executive compensation surrounding the financial crisis will be debated. Firstly, the types of executive compensation will be discussed and the implications of them. Secondly, how executive compensation contributed to the financial crisis will be conferred and thirdly the legal improvements and current process will be analysed. To aid understanding, articles and examples will be used to emphasise the various views of economists regarding executive compensation. Non-Regulation of Executive Compensation Executive Compensation can be described as the monetary bonus, or the non-monetary benefits which an executive receives for their work in an organisation. Executive Compensation can be a highly motivating incentive to work more efficiently, thus benefiting the organisation and keeping the executive content with his contribution and performance. However, this compensation can have adverse effects where the executive does not have the organisations best interest in mind, but...
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...Materials Management Executive Director Performance Evaluation Introduction In the world today, corporations go through a lot of red tape when developing a business. There are certain rules and regulations that should be followed. Detailed in the report will consist of the improvement of leadership evaluation in order to assist in building a successful healthcare organization. Discussions will also include the expectations of the employees and the work practices and procedures that will be obligatory. In developing the leadership evaluation management must consider language, decision-making and daily work practices. An initiative to measure and meet all necessary performance objectives must involve major improvements of the healthcare processes. The following Performance Management’s Key Components are a must with the implementation process. Planning – Set goals and measurements to communicate the company’s requirements. Developing – Address and improve performance Monitoring – Observe productivity. Does the employee comprehend the tasks being implemented? Rating – rate the performance of the employee. Rewarding – compensate and award staff When conducted properly, evaluations serve that purpose by: (1) showing employees how to improve their performance, (2) setting goals for employees, and (3) helping managers to assess subordinates' effectiveness and take actions related to hiring, promotions, demotions, training, compensation, job design, transfers, and terminations...
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...Case Report on Executive Compensation In the modern society, chief executive officer has become the most important part to many companies especially to the publicly listed corporations. They generally make a significant contribution to the profitability of their firm. However, in some case the managers’ interests conflict with their companies’, and thus their decisions may probably do not maximize their companies’ value. Therefore, it is a problem that how shareholders ensure that top executives want to maximize their wealth. This paper explores the principle for compensation, makes an attempt to design a new compensation package to the chief executive officer of Nike, Inc., and finally compare the different between the existing pay package and the new one. I. Introduction Nike, which originally named as Blue Ribbon Sports, is the largest manufacturer of the athletic footwear and apparel in the world, and one of the Fortune 500 companies. Figure1 shows that Nike is the leader of the global athletic footwear market, with around 31% market share in 2007. Creating by Bill Bowerman and Philip Knight in 1962, its early products are footwear, but now it has a wide range of product line. Today Nike is engaged in design, development and marketing of footwear, apparel and equipment, including shoes, sock, gloves, bags, and sports balls and so on. Many of its products are design for specific athletic such as football, basketball, running and even walking. According to figure2,...
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...[pic] Assignment Submission Confirmation --------------------------------------------------------------------------------------------------------- [pic] Assignment Submission Confirmation Kindly Note: Assignments received after the due date for any reason, except medical, will receive a maximum of a PASS and may incur a penalty as per CEE policy. Please note delayed assessments are not fair on students who submit on time. Kindly submit on time as per schedule to avoid any inconvenience. Officer—Keep one copy for yourself and return the other to the student for his/her records. [pic] Assignment Submission Front Page (To Be Filled by the Student) |Course Title | | |and Batch |Higher National Diploma Program (For Example) | |Unit No. and Title | | |Assignment No. | | |and Title | | |Assignment Due Date | |Assignment Submission date | ...
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...to streamline and rearrange. Executive Control: The president can use his power of appointment to place those who are loyal and competent. He can strategically place them where he chooses in top executive positions. He can also use his power of removal from these positions. The president can change reshuffle and reorder his departments to better achieve his purposes. Almost every president reorganizes the White House staff. Restructuring can strengthen accountability, reduce wasteful duplication, and tighten administrative competence and effectiveness. He oversees their daily operations. Reorganizations or appointments are two ways of gaining power over an agency previously protected from presidential influence. The president can have direct command over personnel, programs, and budget over the bureaucracy. The president had the power to propose budgets. Proposals and new regulations and procedures are required to be submitted to the Office of Management and Budget in the Executive Office of the President for approval before it goes to Congress. This is a procedure that gives the White House the opportunity that is aligned with the president’s views and policies. They must formulate policy that meets their own preferences and political needs. These new political appointees must be personally loyal to the president and fully committed to his policy agenda so that he can succeed. Political appointees in these top executive positions can make or break the...
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...Georgia, and China. The research and development is currently housed at the corporate headquarters in San Jose California. The company employs 550 personnel worldwide. Riordan Manufacturing has reported earnings of $46 million. Riordan Manufacturing makes products from plastic injection molding. The company produces and provides the following products: plastic bottles, fans of all sizes, heart valves, medical stents, and custom plastic parts. Presently, our plastic bottles and fans are in the maturity stage. They compete primarily based on the changing economic conditions. Riordan’s future plans include developing the next generation of heart valves, medical stents, and complementary medical devices. The purpose of this executive summary is to highlight and propose changes to the uncoordinated and redundant operations from all manufacturing and testing facilities owned and operated by Riordan Manufacturing. We propose integrating all facilities with Windows based ERP manufacturing software, specifically Solarsoft, which is operated off of IBM System x3850 X5 with MAX5. Buying Cognos software from IBM will help to make all reports look uniform. This will also save time since Cognos pulls data from AS400. We also propose the introduction of barcodes on all inventories. All material will have traceability from the time it enters a company until the time shipment is made to the customer. We currently have the edge in the market due being located in several locations...
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...ARE TOP EXECUTVES WORTH WHAT THEY ARE PAID? Introduction “Republic Bank Executives getting million$- Workers Getting Crumbs!!”- This is at a time when Bank Directors fees are increased by 85 percent to nearly 1 million dollars in one year alone (Trinidad Guardian, February 25,2011). “While Republic Bank Biggies could look forward to a bigger parting gift than $10 Million and FATTER PENSION(BIGGER BANK/BIGGEST PROFITS=BIGGER GIFT/FATTEST PENSION) , a republic bank worker after 30 years service gets an average MONTHLY PENSION OF $2,400.00 and a pat on the back.” It is headlines like the one stated above that continues to bombard the media in recent times. Executive remuneration is one of the most hotly debated topics in the Human Resource (HR) world. Bergmann and Scapello (2002) argue that during the reign of Julius Caesar, centurions received attractive incentives. However, they stressed that longevity of an idea does not mean a lack of controversy surrounding it. In the aftermath of the financial crash and recession 2007-2009, the debate of the executive compensation again has surfaced to the forefront by the media and became the hot issue for academicians, researchers, regulators, policy makers and public. The purpose of this paper is to clearly discuss the issue of executive compensation by presenting arguments for and against it. While there has been an undisputed escalation in Chief Executive Officers (CEOs) pay and in comparison to the earnings of “average” workers...
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...2011 Executive Summary AA is burdened by high labor costs, a weak balance sheet, perpetual union issues, increasing pressure from low-cost carriers (LCCs), incessant losses. AA must address its high costs, improve its international offerings, and find a solution to the competitive threat posed by LCCs Chiu Cloud Supreeth Kini Fabien Levet Amruta Vantipalli 9/1/2011 Table of Contents Introduction........................................................................................................................................................... 2 Financial Health ..................................................................................................................................................... 2 Market Forces ........................................................................................................................................................ 2 Barriers to entry ................................................................................................................................................. 3 Substitutes ......................................................................................................................................................... 3 Suppliers ............................................................................................................................................................ 3 Buyer Power ...............................................................................
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...THE MANAGEMENT OF EXECUTIVE COMPENSATION Posted on November 16, 2011 1 EXECUTIVE COMPENSATION Notes on THE MANAGEMENT OF EXECUTIVE COMPENSATION….. Executive compensation is the total remuneration or financial compensation a top executive receives within an organization. This includes a basic salary, any and all bonuses, shares options, and any other company benefit. Over the past three decades, executive compensation has risen dramatically beyond the rising levels of an average worker’s wage. Executive compensation is an important part of corporate governance, and is often determined by a company’s board of directors. Executive compensation is a very important thing to consider when evaluating an investment opportunity. Executives who are improperly compensated may not have the incentive to perform in the best interest of shareholders, which can be costly for those shareholders. While new laws and regulations have made executive compensation much clearer in company filings, many investors remain clueless as to how to find and read these critical reports. This article will take a look at the different types of executive compensation and how investors can find and evaluate compensation information. WHO IS AN EXECUTIVE? A person or group having administrative or managerial authority in an organisation. The chief officer of a government, state or political division. Chief executive officer (CEO), one of the highest-ranking corporate officers (executives) or administrators...
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