(Business Finance, 9 February 2012) In Brief: While performance-based incentives can be useful in aligning the interests of shareholders and managers, they can also motivate executives to manipulate earnings. Companies need to focus on finding the right mix of incentives to encourage proper behavior and maximize results. Our View: Our recent research on executive compensation, [...]
Read more(Harvard Business Review, January-February 2012) In Brief: This article states that pay for performance strategies are ineffective for four main reasons: 1) It is impossible to determine what tasks will need to be done in the future and therefore how to effectively link pay to performance in the present, 2) Employees often make a concerted [...]
Read more(CFO World, 30 January 2012) In Brief: Recent evidence suggests that the “high-powered incentives” of bonuses and stock options has led some finance leaders to falsify their financial statements, often by shifting revenues to the fourth quarter and increasing accruals upwards. This can potentially lead to lawsuits and other negative consequences. Our View: Executive compensation [...]
Read more(The Economist, 14 January 2012) In Brief: Executive pay in Britain has grown by over 300% between 1998 and 2010, while the worker’s median wage has remained stagnant. Many politicians have called this a “market failure,” and are clamoring for shareholders and staff to constrain compensation for executives. This article, however, argues that the increase [...]
Read more(Business Insider, 30 November 2011) In Brief: While 38 companies failed to receive majority shareholder support for their say-on-pay proposals in 2011, an additional 157 did not receive at least 70% support. According to corporate governance watchdog Governance Metrics International (GMI), if these corporations don’t address concerns over their executive compensation policies, they run the [...]
Read more(The Harvard Law School Forum, 15 November 2011) In Brief: Between 1 January and 1 July of last year, just 37 out of 2,340 say-on-pay proposals (less than 2%) failed to receive majority shareholder support. The 37 companies that received advisory votes against their executive compensation packages failed to receive shareholder support for a number [...]
Read more(The Harvard Law School Forum, 15 November 2011) In Brief: Between 1 January and 1 July of last year, just 37 out of 2,340 say-on-pay proposals (less than 2%) failed to receive majority shareholder support. The 37 companies that received advisory votes against their executive compensation packages failed to receive shareholder support for a number [...]
Read more(SmartBusiness, 1 November 2011) In Brief: To attract and retain high-quality executives, companies need to have competitive compensation packages. According to the author of this blog, companies should tie executive compensation to bonus and incentive awards and include severance pay provisions and supplemental retirement packages. Our View: Companies can increase the effectiveness of their executive [...]
Read more(The Australian, 11 October 2011) In Brief: Woolworths’ new CEO will be paid less than his predecessor due to his relative experience. Short- and long-term incentives will also be capped at the total remuneration, and the final payment would be determined by corporate and financial performance measures. Shareholders will vote on these incentives next month. [...]
Read more(PRWeb, 10 October 2011) In Brief: According to the results of a new executive compensation survey, executive salaries for CEOs, CFOs, presidents, and treasurers have risen from their 2010 levels. Our View: Companies should relate their compensation policies directly to executive behavior by shifting focus from how much executives are paid to how they are [...]
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