fraud is committed. By the same token, Fannie Mae’s $9 billion of overstated earnings from 2001-2003 also became a strong representation for the executive deception that was committed during this time period (Harvard Law School Case). However, the reasons for the fraud itself are often overlooked. While we can’t be certain that executive compensation practices contributed to this fraud, it undoubtedly did not strengthen the idea of producing firm value for the benefit of shareholders. Fannie
Words: 5626 - Pages: 23
Part 4: Compensating Human Resources Chapter 11: Variable Pay and Executive Compensation Prepared by Linda Eligh, University of Western Ontario Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 11–1 Learning Objectives After you have read this chapter, you should be able to: 1. 2. 3. 4. 5. 6. Define variable pay and identify three elements of successful pay-for-performance plans. Discuss three types of individual incentives. Explain three ways that sales employees
Words: 1689 - Pages: 7
PRINCIPLES FOR PERIODIC DISCLOSURE BY LISTED ENTITIES Final Report TECHNICAL COMMITTEE OF THE INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS FEBRUARY 2010 CONTENTS Chapter 1 Introduction Uses of Annual Reports Scope Presentation Glossary of Defined Terms Principles for Periodic Disclosure by Listed Entities A. Periodic reports should contain relevant information B. For those periodic reports in which financial statements are included, and should state that the financial information
Words: 11765 - Pages: 48
Trent Dewberry Corporate Governance Case 7 September 11, 2012 The Board-Management Relationship After almost a full year as a member of the Mega Corporation Board of Directors, Jack Wright felt confident in his assessment of the functionality of the organization. Wright found that the company had a strong balance sheet, several successfully operating businesses, and some other businesses that could be sold. Yet Wright also found that there were several issues that were not being addressed. Wright
Words: 840 - Pages: 4
Executive Compensation | BLAW 5175 Simulation Exercise #1 | Group Aerospace | Part 1: The objectives of executive compensation: The issue of executive compensation is a topic of much debate. Executives are often ridiculed as their compensation packages may not coincide with the performance of their organization or be deemed too lavish by shareholders or advocacy groups. However, compensation is not decided arbitrarily. Organizations enlist boards and outside consultants, and with
Words: 1493 - Pages: 6
There are two common conflicting interests between the owner and the manager; compensation and project selection. Sometimes the managers receive compensation which does not have any incentive for them to avoid risky decisions, other times they are forced to make risky decisions if they are pushed too hard to increase the company’s profits. In such a case, companies have come up with executive compensation packages, these packages are connected to the performance of the company and come inform
Words: 268 - Pages: 2
Executive compensation is a topic that has been criticized and debated for many years. There are those who believe that CEO’s are paid too much and those who believe they are either underpaid or receiving what they deserve. There are several components that make up an executive compensation. A committee is created of three to five members of the board of directors who decide on the compensation. The NYSE requires that the members of the committee be independent directors; therefore the CEO of the
Words: 613 - Pages: 3
Name Instructors Name Institution Date Introduction Compensation in the organization takes a large share of costs in an organization. The compensation should be addressed from a strategic level since it constitutes the most important expense for any organization. In the long term, the organizational productivity and performance is influenced by the compensation system, and whether the system is effectively used. An adequate compensation in an organization can turn the unproductive employees and
Words: 2598 - Pages: 11
3—Summer 2003—Pages 71–92 Executive Compensation as an Agency Problem Lucian Arye Bebchuk and Jesse M. Fried E xecutive compensation has long attracted a great deal of attention from financial economists. Indeed, the increase in academic papers on the subject of CEO compensation during the 1990s seems to have outpaced even the remarkable increase in CEO pay itself during this period (Murphy, 1999). Much research has focused on how executive compensation schemes can help alleviate the
Words: 17317 - Pages: 70
food on the table. We have corporate executives making millions of dollars a year. For instance, the top 5 executives made 258 million in one year at Verizon Communications. The CEO Lowell McAdams salary is not even included in that figure. The company has even found a way to get a tax rebate for 1.3 billion. This is after the company reported had 19 billion in profits. This is just a typical example of the greed that takes place with CEO’s and other executives. These types of salaries are over the
Words: 323 - Pages: 2
