Dialogue: CEO Compensation

2011 ◽  
Vol 21 (4) ◽  
pp. 679-691 ◽  
Author(s):  
Robert Kolb ◽  
Jeffrey Moriarty
Keyword(s):  
Board Of Directors ◽  
Ceo Compensation ◽  
Fiduciary Duty ◽  
Market Process ◽  
Minimum Level ◽  
Compensation Committee ◽  
The Board Of Directors ◽  
Wage Negotiation

ABSTRACT:In this journal, Jeffrey Moriarty argued that CEOs must refuse to accept compensation above the minimum compensation that will induce them to accept and perform their jobs. Acting otherwise, he maintains, violates the CEO’s fiduciary duty, even for a CEO new to the firm. I argue that Moriarty’s conclusion rests on a failure to adequately distinguish when a person acts as a fiduciary from when she acts on her own account as a person. Further, Moriarty’s argument assumes that the CEO knows this minimum level of compensation. However, we learn the suitability of compensation only through the market process of wage negotiation, not through some process of introspection. I conclude that a CEO who abstains from interfering with the board of directors and its compensation committee is morally free to negotiate for the highest wage available.

scholarly journals Penerapan Asas Piercing The Corporate Veil: Perspektif Tanggung Jawab Direksi Perseroan Terbatas

2018 ◽  
Vol 1 (1) ◽  
pp. 45
Author(s):  
Putri Sari Harahap ◽  
Tumanggor Tumanggor
Keyword(s):  
Board Of Directors ◽  
Common Law ◽  
Descriptive Analysis ◽  
Secondary Data ◽  
Good Faith ◽  
Fiduciary Duty ◽  
Legal Research ◽  
The Board Of Directors ◽  
Piercing The Corporate Veil ◽  
The Veil

<p>Piercing The Corporate Veil principle is a common law doctrine that teaches about the veil special breakout company (corporate veil) covering the Board of Directors and other organs in running the company does not fit or have violated the principle of fiduciary duty (good faith) to the intent and purpose of the company.This type of research in this thesis is a normative legal research means tend to use secondary data in the form of primary legal materials, secondary law and tertiary  legal materials. To collect the data in this research is a stud y done by the descriptive analysis. The resulted in losses for both the company and third parties, First Defendant's actions can be categorized  as a tort (onrechtmatige daad) under Article 1365 of the Civil Code. In the verdict the judge in his ruling has been applying the principle of piercing the corporate veil but does not necessarily resolve the matter of debts between the Compa- ny (Plaintiff) with rights holders of promissory notes "mayofield notes" or the Board of Directors (Defendant 1) with the holders of promissory notes " mayofield note.</p><p>Keywords: Piercing the corporate veil, directors fiduciary duty</p>

7 Governance Issues in Offshore Companies Used as Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Board Of Directors ◽  
Private Investment ◽  
The United States ◽  
Fiduciary Duty ◽  
Duty Of Care ◽  
Cayman Islands ◽  
Investment Funds ◽  
The Board Of Directors ◽  
The Uk

This chapter examines issues of governance arising from the use of offshore companies as private investment funds. Funds established in offshore jurisdictions are often structured as limited companies that issue shares to investors. Governance issues can arise in offshore companies when voting rights are separated from economic participation. The chapter first considers the role of the board of directors in private investment funds before discussing taxation issues affecting offshore companies used as private investment funds in the UK and in the United States. It then explains the duties of directors under Cayman Islands law, including fiduciary duty, duty of care, diligence, and skill, and duty of confidentiality. It also describes the composition of the board of directors, its meetings, relationship with the fund manager, and responsibility for approval of fund documentation.

scholarly journals Board Committees, CEO Compensation, and Earnings Management

2009 ◽  
Vol 84 (3) ◽  
pp. 869-891 ◽  
Author(s):  
Christian Laux ◽  
Volker Laux
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Ceo Compensation ◽  
Incentive Pay ◽  
Compensation Committee ◽  
Board Committees ◽  
Ceo Incentives ◽  
Ceo Pay ◽  
The Board Of Directors

ABSTRACT:We analyze the board of directors' equilibrium strategies for setting CEO incentive pay and overseeing financial reporting and their effects on the level of earnings management. We show that an increase in CEO equity incentives does not necessarily increase earnings management because directors adjust their oversight effort in response to a change in CEO incentives. If the board's responsibilities for setting CEO pay and monitoring are separated through the formation of committees, then the compensation committee will increase the use of stock-based CEO pay, as the increased cost of oversight is borne by the audit committee. Our model generates predictions relating the board committee structure to the pay-performance sensitivity of CEO compensation, the quality of board oversight, and the level of earnings management.

scholarly journals KEPUTUSAN BISNIS DAN TANGGUNGJAWAB DIREKSI DALAM PRINSIP FIDUCIARY DUTIES PADA PERSEROAN TERBATAS

2019 ◽  
Vol 1 (2) ◽  
pp. 37-56
Author(s):  
Ali Muhayatsyah
Keyword(s):  
Board Of Directors ◽  
General Principle ◽  
Limited Liability ◽  
Good Faith ◽  
Fiduciary Duty ◽  
Limited Liability Company ◽  
Fiduciary Duties ◽  
Business Judgment Rule ◽  
The Board Of Directors ◽  
Full Sense

The main party charged with fiduciary duty is the board of directors. In UUPT No. 40/2007 it does not specifically regulate fiduciary duty but rather regulates general principles. From the general principle of fiduciary duty, directors in managing the company must pay attention to the interests of the company above other interests; directors must act in accordance with the aims and objectives of the company (intra vires), and pay attention to the limitations and restrictions determined by the law and the articles of association of the company. In carrying out their duties as directors, they are required to have in good faith and in full sense of responsibility; Directors must carry out their duties diligently, carefully, and smartly and skillfully. Keywords: Directors, Fiduciary Duty, Business Judgment Rule, Limited Liability Company,   Abstrak Pihak utama yang dibebankan kewajiban fiduciary duty adalah direksi. Dalam UUPT Nomor 40 Tahun 2007 tidak mengatur secara khusus mengenai fiduciary duty tetapi mengatur prinsip-prinsip umumnya. Dari prinsip umum fiduciary duty makadireksi dalam mengurus perseroan harus memperhatikan kepentingan perseroan di atas kepentingan lainnya;direksi harus bertindak sesuai dengan maksud dan tujuan perseroan (intra vires), serta memperhatikan batasan dan larangan yang ditentukan UU dan anggaran dasar Perseroan. Dalam melaksanakan tugas sebagai direksi, diharuskan memiliki itikad baik (in good faith) dan tanggung jawab (in full sense of responsibility); Direksi harus melaksanakan tugasnya dengan rajin (diligently), penuh kehati-hatian (carefully), dan pintar serta terampil (skillfully). Kata kunci: Direksi, Fiduciary Duty, Business Judgement Rule, Perseroan Terbatas,

scholarly journals New Zealand CEO compensation factors

2009 ◽  
Vol 6 (4) ◽  
pp. 47-53 ◽  
Author(s):  
Sam Hurst ◽  
Ed Vos
Keyword(s):  
New Zealand ◽  
Board Of Directors ◽  
Firm Size ◽  
Significant Relationship ◽  
Ceo Compensation ◽  
Board Members ◽  
Effective Factors ◽  
The Board Of Directors ◽  
Size Firm ◽  
Determining Factor

This paper analyses a combination of factors to try and determine whether they explain CEO compensation, and in turn help determine what makes the board of directors more effective. Factors include busy boards, local or international board members, dependent and not independent board members, director’s pay and tenure variables. Of the new and old factors considered in this approach and using a sample size of 31 NZ firms over the 2006/2007 years, a correlation existed between firm size/firm performance and CEO compensation. Further distinctions in regards to busy boards showed no significant relationship to CEO compensation, differing from previous studies, and casting doubt on whether it matters how busy the board is. Also the locality of the board was not a determining factor in CEO compensation.

scholarly journals Evidence from 1992 to 2019 on the dynamics of managerial authority and CEO remuneration during company crises

2022 ◽  
Vol 10 (4) ◽  
Author(s):  
Chin Tae Zan
Keyword(s):  
Board Of Directors ◽  
Ceo Compensation ◽  
Secular Trends ◽  
Managerial Incentive ◽  
Management Board ◽  
Strong Trend ◽  
Managerial Authority ◽  
The Board Of Directors ◽  
Matching Estimator ◽  
The Impact

We investigate the dynamics of two governance constructs, management influence over the board of directors and CEO remuneration, in enterprises in crisis from 1992 to 2019. Data reveal a strong trend of improving governance over time, which confounds the conclusion concerning the impact of distress on governance. Using a bias-corrected matching estimator to control for secular trends, we find that distressed businesses cut management board appointments and CEO compensation, deepen managerial incentive alignment, and increase CEO turnover. The performance-related component of CEO remuneration accounts for the majority of changes in CEO compensation in troubled businesses, which is consistent with the "shareholder value" perspective on CEO compensation.

The compensation committee and the remuneration of the directors

2014 ◽  
Vol 27 (1) ◽  
pp. 46-74 ◽  
Author(s):  
María Consuelo Pucheta‐Martínez ◽  
Cristina Narro‐Forés
Keyword(s):  
Board Of Directors ◽  
Design Methodology ◽  
Executive Directors ◽  
Content Type ◽  
Compensation Committee ◽  
The Board Of Directors

Purpose The purpose of this paper is to analyze if the composition and activity of the appointment and remuneration committee have a significant effect in the remunerations of the members of the board of directors. Design/methodology/approach To achieve the paper's objective the authors proposed four hypotheses in order to analyze the repercussions of independent, institutional and executive directors in the Appointment and Retribution Committee (ARC) and its activity in the directors’ remunerations. Findings The results put into evidence that the composition (independent, institutional and executive members) of the ARC is not associated with the variation of the directors remuneration mean, while the activity of the ARC influences positively this remuneration mean, contrary to what was expected. Originality/value The ARC in Spain is not effective in fixating the directors’ remunerations. Propósito El objetivo de este artículo es analizar si la configuración y actividad de las comisiones de nombramientos y remuneraciones (CNR) tienen un efecto significativo en las remuneraciones de los miembros del consejo de administración. Diseño/metodología/enfoque Para alcanzar el objetivo del artículo hemos planteado cuatro hipótesis con la finalidad de analizar la repercusión de los consejeros independientes, dominicales y ejecutivos de las CNR y la actividad de las mismas en las remuneraciones de los consejeros. Hallazgos Los resultados ponen de manifiesto que la composición (miembros independientes, dominicales y ejecutivos) de las CNR no se asocian con la variación de las remuneraciones medias de los consejeros, mientras que la actividad de las CNR influye de manera positiva, contrario a lo pronosticado, en las variaciones de las retribuciones medias de los consejeros. Originalidad/valor Las CNR en España no son efectivas en la fijación de las retribuciones de los consejeros.

scholarly journals Pengaturan Kewenangan, dan Tanggung Jawab Direksi Dalam Perseroan Terbatas (Studi Perbandingan Indonesia dan Australia)

2013 ◽  
Vol 2 (1) ◽  
Author(s):  
Shinta Ikayani Kusumawardani
Keyword(s):  
Comparative Study ◽  
Board Of Directors ◽  
Comparative Method ◽  
Limited Liability ◽  
Fiduciary Duty ◽  
Limited Liability Company ◽  
Company Limited ◽  
Fiduciary Obligations ◽  
The Board Of Directors ◽  
Comparative Results

Research on: The Rules Regarding  The Powers and Responsibilities Of Directors In A Limited Liability Company (Comparative Study of Indonesia and Australia). As for the issues discussed in this study related to the application of the authority of the board of directors in the management of a limited liability company under the principle of fiduciary duty Australia comparison of Indonesia can not be separated from the authority granted will cause responsibility that must be borne by the company’s board of directors in managing and also the characteristics of the type of responsibility of Directors This study uses normative juridical approach. Juridical Approaches to run whether the provisions of law relating to kewenagan concrete and responsibilities of the Board of Directors in the management Company Limited Comparative Study of Indonesia and Australia, while Normative is the cover of the principles of law, comparative law, the elements and factors related to authority and responsibility of the Company's Board of Directors in the management of one heart-to-day. This study on Duties and Responsibilities of Directors is normative legal research that emphasizes the study of literature. The purpose of this research is to know the duties and responsibilities of the Board of Directors of Limited Liability Company under the law. Data analysis was performed using the comparative method of qualitative. From the results of this analysis are expected to obtain an accurate picture and understanding of the duties and responsibilities of the Board of Directors of Limited Liability Company. To this effect, a comparison of the authority and responsibilities of the Board of Directors in the management of the Company as the Company's assessment of body organ is the comparison between the authority of the Board of Directors in Indonesia and in Australia the comparative results indicate that the system of regulation in Indonesia and Australia are more inclined to use the model and not a model enabling mandatory because it is based by the condition of the structure of capital ownership. Fiduciary obligations, particularly on legislation in both Indonesia and Australia appear as incomplete law and need to be interpreted by the fiduciary. The main essence of this comparison as the basis for further transplants Indonesia that fiduciary obligations may fruitfully dalamn Handling Company Limited.

Gender gaps at the top: Does board composition affect executive compensation?

2018 ◽  
Vol 72 (8) ◽  
pp. 1292-1314 ◽  
Author(s):  
Alison Cook ◽  
Alicia R Ingersoll ◽  
Christy Glass
Keyword(s):  
Executive Compensation ◽  
Board Of Directors ◽  
Leadership Roles ◽  
Pay Equity ◽  
Board Diversity ◽  
Compensation Committee ◽  
Board Committees ◽  
The Board Of Directors ◽  
Top Executive ◽  
Compensation Gap

Will adding women to the board of directors reduce firm gender pay disparities? Our research suggests ‘no’ … and ‘yes.’ It is not a matter of simply adding more women to the board or integrating women into key board committees that moves the needle. If firms really want to stimulate change through board diversity, then they need to empower female directors and place them in key leadership roles. We find that women’s integration on the board of directors and on the compensation committee has no significant impact on lessening the compensation gap within the top executive team. However, when women influence compensation decisions through service as the chair of the compensation committee, the top executive compensation gap is diminished. Our analysis relies on a dataset built by the authors of all top management team executives and board members from the S&P 500 from 2009–2013. We test three mechanisms that may enable women to overcome limitations with respect to pay equity: (i) integration, (ii) direct decision making and (iii) influence. Our findings suggest that not all types of power are equal; the more direct influence women have over compensation decisions, the smaller the compensation gap.

Whose side are you on?

2017 ◽  
Author(s):  
Graeme Guthrie
Keyword(s):  
Board Of Directors ◽  
Bargaining Power ◽  
Fiduciary Duty ◽  
Senior Executives ◽  
Short Term ◽  
Strong Ties ◽  
Governance Practices ◽  
The Board Of Directors ◽  
Lock In

The board of directors has a fiduciary duty to the shareholders who elect its members to monitor, advise, and if necessary replace the CEO and other senior executives. One way to analyze the interactions between boards and executives is as an ongoing series of bargaining games. Strong ties can develop between directors and executives, which affect the bargaining power of the various participants. Short-term changes in bargaining power can lead to negotiated changes in board composition that lock in the altered bargaining power for the long term. This chapter uses Ray Irani’s tenure as CEO of Occidental Petroleum to describe the bargaining game interpretation of board-CEO interactions and to demonstrate how this framework can explain many observed corporate governance practices.

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