| Description |
1 online resource (xvii, 259 pages) : illustrations |
| Contents |
Prologue: the compensation committee meets -- Introduction: the battle over executive compensation -- Executive compensation in the U.S. corporate model -- The goals of executive compensation -- Our approach -- The myths and realities of pay-for-performance -- The realities of pay-for-performance -- Other issues -- Case studies of pay-for-performance -- Managerial power -- Academic response to Bebchuk and Fried -- The realities of managerial power -- Camouflaged compensation -- At-the-money strike prices -- Repricings and reloads -- Diversifying, hedging, and timing -- Peer group data and upward bias -- Other factors in setting pay -- Fixed shares versus constant-dollar techniques -- Conflicts of interest -- External pressures: the new context for executive compensation -- Characteristics of external forces -- Cyclical reforms and unintended consequences -- The genesis of the current environment -- The regulators -- Securities and Exchange Commission -- Financial Accounting Standards Board -- Internal Revenue Service -- NYSE and NASDAQ -- Congress -- The reformers -- Institutional investor perspectives -- Concerns with lack of pay-for-performance -- Stock incentives -- Performance metrics -- Severance and change-in-control agreements -- The financial activists -- LBO impact -- Impact of change-in-control protection -- Hedge funds -- Media critics and public figures -- What we can learn -- End of an era: the decline of the stock option -- The 1990s: the decade of the stock option -- 2000--2002: a turning point -- The decline of the stock option -- The realities of expensing -- Perceived value -- The case for stock options -- Growth companies -- Situational cases -- Costs and stock prices -- Reducing the expense -- The future of long-term incentives -- Factors influencing LTI design -- Designing a LTI program -- Setting performance goals and metrics -- Basis for measurement -- Internal goals -- External goals/Indexing -- Hybrid goals -- Goal setting -- Determining share award sizes -- A look to the future -- Executive stock ownership: the solution to the executive compensation crisis -- Agency theory and costs -- Moral hazard -- Driving superior returns -- Stock incentive levels and structures are in transition -- Stock ownership guidelines -- Stock holding requirements -- Net share retention requirements -- Other mechanisms for creating ownership -- Management stock purchase plans -- Tax implications -- FAS 124(R) -- Finding the right solutions -- Director compensation in the new environment -- The evolution of director compensation -- Move away from stock options -- Activity-based compensation -- Compensating committee chairs and members -- General Electric as a reference point -- Director compensation levels and mix -- Director share ownership -- Stock ownership guidelines -- Net share holding requirements -- Ownership effectiveness -- Structuring the optimal director compensation package -- The future of director compensation -- The compensation committee: creating a balance between shareholders and executives -- Legal context -- Right from wrong? -- Are stock options performance-based? -- Are performance shares the perfect solution? -- Should directors be required to own company stock? -- Should peer groups be used to set executive pay? -- What constitutes a good board member? -- Foundations for best practices -- Creating excellence in corporate governance -- Institutional and regulatory governance recommendations and mandates -- Consultant independence -- Setting the CEO's pay as rigorously as possible -- Case study of an internal promotion -- Creating a pay-for-performance environment -- Rule 10b5--1 plans--preannounced purchases or sales of stock -- Best governance practices in designing annual and long-term incentives -- Aligning all employee pay to improve corporate performance -- Elements of alignment -- Aligning architecture and performance measures -- Untenable forms of alignment -- Performance pay solutions -- Merit increases -- Short-term incentives -- Stock-based incentives -- Employee stock ownership -- The role of stock options -- Moving beyond options -- Converting to restricted stock -- Adjusting stock-based incentives -- Alignment in practice -- Building better alignment -- International executive pay comparisons -- U.S. competitive advantage -- The international executive pay gap -- United Kingdom -- France -- Canada -- Asia -- Japan -- Singapore -- China -- Hong Kong -- Summary -- Conclusion: the future of executive compensation -- Epilogue: back in the boardroom --Appendix A. Legal and regulatory requirements for executive compensation plans -- Nonqualified stock options -- Incentive stock options -- Stock appreciation rights -- Restricted stock units -- Restricted stock -- Appendix B. Summary of the regulatory and institutional mandates and recommendations -- CalPERS -- TIAA-CREF -- Fidelity -- Vanguard -- Union-sponsored funds -- Other organizations -- The Council of Institutional Investors -- Institutional Shareholder Services -- Glass, Lewis & Company -- National Association of Corporate Directors -- The conference board -- Appendix C. Academic articles on pay-for-performance and the executive labor market |
| Summary |
"The executive pay model used widely in the United States is essential both to the continued success of companies and to the U.S. economy itself. The successful application of this model, which is built on the foundation of pay-for-performance, has helped create an economic juggernaut, resulting in trillions of dollars of wealth for shareholders and substantial income and net worth for millions of corporate employees and their families. High executive pay simply reflects the strong demand for top talent and can only be evaluated with consideration of the performance that leads to high pay. Yet, myths of a failed model still abound, perpetuated by occasional excesses, recent corporate scandals, and controversy over the use of stock options |
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This book documents the realities of executive compensation by investigating the extent to which the pay-for-performance model governs executive pay levels. It also assesses the relative success of this model in creating value for shareholders and robust job growth for U.S. employees and provides detailed, real-world guidance for designing and executing effective executive compensation plans. Based on extensive empirical research and decades of direct experience in the field, Myths and Realities of Executive Pay settles the debate about executive compensation and the role it plays in the broader U.S. economy."--Jacket |
| Bibliography |
Includes bibliographical references (pages 243-252) and index |
| Notes |
Print version record |
| Subject |
Chief executive officers -- Salaries, etc. -- United States
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Executive ability -- United States
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Competition, International.
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BUSINESS & ECONOMICS -- Labor.
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POLITICAL SCIENCE -- Labor & Industrial Relations.
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Chief executive officers -- Salaries, etc.
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Competition, International
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Executive ability
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Bedrijfsleiders.
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Beloningen.
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Economische aspecten.
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Internationale aspecten.
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United States
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Verenigde Staten.
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| Form |
Electronic book
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| Author |
Van Putten, Steven.
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| ISBN |
9780511499296 |
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0511499299 |
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9780511335495 |
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0511335490 |
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0511334915 |
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9780511334917 |
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9780521871952 |
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0521871956 |
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9781107564909 |
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1107564905 |
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