Is CEO Compensation Directly Related to Performance - Term Paper Example

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Is CEO Compensation Directly Related to Performance

INTRODUCTION Executive or CEO pay is a financial compensation which is a combination of basic salary, bonuses or shares of the company stock etc. CEO pay is an important aspect for corporate governance and is determined by the company board of directors. PROBLEM STATEMENT Several theories have been designed for evaluating job performance and their relation with CEO pay structure. CEO compensations have been a subject of scrutiny for several years and through this paper I will evaluate whether or not CEO compensation is directly related to his/her performance. The financial breakdown faced by several companies has forced board of directors to design framework for assessing CEO’s performance and offer incentives accordingly. The board of directors employs methods for aligning the CEO’s actions with their company success and this can only be achieved through paying according to their performance. It happens as such that CEO fortune rise and fall with organization success or failure (Core J. R., 2002). RESEARCH QUESTIONS The first problem area will find out multiple determinants of CEO pay, including financial performance, CEO risk attitude, human resources and board structure. ...Show more

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IS CEO COMPENSATION DIRECTLY RELATED TO PERFORMANCE TABLE OF CONTENTS EXECUTIVE SUMMARY 4 INTRODUCTION 4 PROBLEM STATEMENT 4 RESEARCH QUESTIONS 5 LITERATURE REVIEW 5 STRUCTURAL FRAMEWORK AND METHADOLOGY 6 DATA COLLECTION METHODS 6 ANALYSIS OF FINDINGS 6 SUMMARY AND CONCLUSION 7 REFERENCES 8 EXECUTIVE SUMMARY It has been observed globally that organization pay their CEO’s competitive prices for aligning their organization performance…
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