CHECK THESE SAMPLES OF CEOs Compensation as an Agency Problem
It has been observed that average employees in the USA need to work hard for a whole year to generate one day's salary of most of the ceos listed in the Fortune 500'.... According to the report of ‘United for a Fair Economy' (UFE), the ceos in the big companies get almost 10....
11 Pages
(2750 words)
Dissertation
The principals in the case companies are the shareholders while agents are the executives; in this relation, the agency theory tackles any problem that may arise between the principal and the agent in the course of running the business.... In reference to the objective brought by the economist over the hefty pays that go to the executives even during the period of economic crunch, this paper critically examines the agency theory and explains why it is impossible to explain the compensation of the executives with the provision of the theory....
9 Pages
(2250 words)
Essay
Recent examples (Enron and WorldCom) show this to be still a problem.... The paper "Executive compensation and Company Performance" states that evidence that executive pay is tied to company performance does not, however, deny that greedy executives have abused governance gaps to exploit conflicts.... Gabaix and Landier (2006) observed that a large part of the increase in CEO compensation in the U.... These hired managers (agents or executives as they are now called because they carry out or execute the plans of principals) have their own interests, the main of which is to receive adequate levels of compensation or pay to convince them to work for the principal and in such a work environment....
9 Pages
(2250 words)
Coursework
This paper attempts to explain the problem which exists between the agents and corporation within the link of contracts.... The problem arises due to the separation of ownership and control.... But the problem is that it does happen, investors behave rationally not always, and the factors of human behaviour and psychology are tricky to fit in a finance framework or an economic hypothesis.... Differences between managers and shareownersAgency theory brings up a basic problem in organizations and that is self-interested conduct....
11 Pages
(2750 words)
Essay
Thus, agency theory provides us with the rational for an effective human resource management policy.... Within this area of research, an increasing body of literature contains the argument that, high performance work practices, including comprehensive employee's recruitment, selection procedures, incentives compensation and performance management systems, and extensive employee's involvement and training can improve the knowledge, skills and abilities of firms2.
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6 Pages
(1500 words)
Essay
agency theory which suggest otherwise that the managers and shareholders can conflict with each other when pursuing their individual goals and that the managers can engage into practices where they may take actions which may not help maximizing the shareholders value and rather work in their own benefits.... xecutive compensation is one such domain where modern executives are largely being criticized for taking high compensations mostly on the pretext that money spent on their compensation could have been utilized for creating value for the shareholders....
9 Pages
(2250 words)
Essay
ccording to Bertrand & Mullainathan (2001) the remuneration of the CEOs in an organisation is based on the principle of the economic agency model.... Moreover, the principle of agency model sometime helps the... In the today's business scenario, compensation of the higher authorities or executives, including the Chief Executive Officers (CEOs) and other officers are generally based During the time of peek economy the company has to endure extra remuneration and compensation for the CEOs....
6 Pages
(1500 words)
Essay
This paper includes 3 academic journals to show the studies conducted in proving that the flawed structure of compensation has led to the collapse of banks.... The second paper reviewed was the 'Bank Executive compensation and Income Management' written by William B.... To compare with the first academic journal, in Joyce's study, the flawed system in compensation and the discretionary power of the managers and executives have been pointed out by the author....
12 Pages
(3000 words)
Literature review